Friday, October 27, 2000
B of A leery of ACTM
--10:52 am - By Michael Baron
ACT Manufacturing (ACTM: news, msgs) is falling $14.31, or
29.8 percent, to $33.56, after the Hudson, Mass., provider of
electronics manufacturing services reported adjusted third-
quarter earnings of $9.6 million, or 53 cents a share, up
from last year's equivalent profit of $4 million, or 31
cents a share. These results, which exclude items, topped
First Call's average estimate for a profit of 45 cents a
share. Revenue rose 105 percent in the latest three months to
$368.5 million from $180.1 million in the same period a year
earlier. However, Banc of America cut its rating on the
company to "market perform" from "strong buy" due to worries
about the company's balance sheet. "Accounts payable rose 216
percent sequentially to $378 million, up from $125 million,"
the firm said in a research note accompanying the downgrade.
"While the company made two acquisitions that would obviously
cause a change, we are not comfortable recommending purchase
of these shares with payables at this level and a debt-to-
capital ratio at 67 percent, or 2x that of the industry average." |
