Energy Conversion Devices (Nasdaq:ENER) Lowers Guidance – Cowen’s Stone Weighs In
Source: http://feedproxy.google.com/~r/smallcappulse/feed/~3/gS4_9ts0lAI/Posted on Tuesday, March 17th, 2009 | In Small & Micro Cap
March 17, 2009 ndash; Analyst Comments ndash; Cowen amp; Companyrsquo;s Robert Stone weighed in on Energy Conversion Devices (Nasdaq:ENER), which lowered guidance yesterday afternoon on delayed shipments. Despite its withdrawal of previous guidance, Stone maintains an OUTPERFORM rating on the stock, with 50% upside vs. the market in 12-months. He also noted that the stock could trade near book value in the near term.
Lowered Guidance
Energy Conversion Devices reduced its Q3 revenue estimates for the Q3 to be flat on a Y/Y basis, at about $70 million, down from previous guidance in a range of $95 million to $110 million for the quarter. For the year, the company is estimating revenue to be between $395 and $440 million. Management also said it is consolidating production, which will result in the elimination of about 70 jobs, and it is suspending production for two weeks starting on March 22.S
tonersquo;s Takeaways
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Despite delays, exacerbated most in the US, ENER should be well positioned to benefit from the stimulus funds, though the impact will likely not be seen until FY2010;
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Expect charges of $2 to $3 million in Q3/Q4 on elimination of about 70 jobs;
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Cutting FY09-FY11 revenuenbsp; estimates to $349M, $510M and $810M; cutting EPS to $0.61, $1.25 and $2.50; reduced shipments to 110MW, 189MW and 333MW; estimated ASPs unchanged; lower utilization will reduce GM to 33.7%, 31.6% and 31.9%.
The stock opened lower by 25% this morning, down about $4.60 to $13.80, so Stonersquo;s projection that the stock could trade to book in the near term looks to be on target.
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