Digital Microwave Shares Slide On Analyst's Comments
Dow Jones Online News, Tuesday, June 22, 1999 at 20:58
By Tom Locke, Staff Reporter
DENVER -(Dow Jones)- Digital Microwave Corp.'s shares dropped 20%
Tuesday after an analyst dimmed his forecast for the wireless-
communications gear maker.
PaineWebber Inc. analyst Walter Piecyk Tuesday morning cut his
earnings-per-share estimate for the San Jose, Calif., company to
16 cents a share from 31 cents a share for the 2001 fiscal year 2000.
And for fiscal 2001, he cut his estimate to 44 cents from 58 cents,
he said.
Piecyk also cut his revenue estimate for fiscal 2000 to $270 million
from $315 million, and for fiscal 2001 to $330 million from $400
million. Plus, he lowered his stock price target to $11 a share from
$12 a share, he said.
"Our opinions are based on discussions with senior managers," said
Piecyk.
He said it now appears the microwave radio business is not going to
turn around as early as he thought.
But Deutsche Banc Alex. Brown wireless equipment analyst Brian Modoff
attributed the stock drop to Piecyk having cut his estimates.
But, said Modoff, "We disagree." He said there is a recovery in
demand already under way for products from Digital Microwave, which
makes point-to-point radios that connect bay stations in wireless
telephone networks.
"We think the company's business is doing well," he said, noting that
his opinion is based on conversations with Digital Microwave
executives Tuesday and two weeks ago.
"The company's not changed their outlook and continues to see strong
demand," Modoff said.
For fiscal 2000, Modoff is estimating Digital Microwave earnings per
share of 20 cents on revenue of $303 million. For fiscal 2001 he is
estimating earnings per share of 50 cents on revenue of $379 million.
The mean estimate of 10 analysts surveyed by First Call are for
fiscal 2000 earnings of 24 cents a share and fiscal 2001 earnings of
53 cents a share.
Digital Microwave (DMIC) shares Tuesday fell $2.688 to $10.75 on
volume of 3.5 million, compared with average daily Nasdaq-volume of
737,000.
Copyright (c) 1999 Dow Jones & Company, Inc.
All Rights Reserved.
Companies or Securities discussed in this article:
Symbol Name
NASDAQ:DMIC Digital Microwave |
