Ancor Plunges 0n Speculation That Revenue Will Miss Estimates
Eden Prairie, Minnesota, Jan. 7 (Bloomberg) -- Ancor Communications Inc., a maker of high-speed computer network switches, fell 19 percent on speculation that fourth-quarter revenue will miss estimates.
Ancor fell 10 13/16 to 45 1/8 in trading of 8.5 million shares, more than six times the three-month daily average. Its shares reached 37 3/4 earlier and have about fallen about 37 percent since Monday's close of 71 7/16. After-hours trading of its shares was halted.
Ashok Kumar, a U.S. Bancorp Piper Jaffray analyst, said he expects that Ancor will delay booking about $500,000 in revenue for the fourth quarter from Sun Microsystems Inc. and instead record that revenue in the first quarter and beyond. He said the delay doesn't change his fourth-quarter earnings estimate of a loss of 5 cents a share.
``The fundamentals are intact, and they have a long-term opportunity that is huge,' said Kumar, who rates Ancor a ``buy.'
The Eden Prairie, Minnesota-based company is expected to report on Jan. 27 a loss of 5 cents a share, the average estimate of nine analysts surveyed by First Call/Thomson Financial.
Ancor makes high-speed computer network switches based on so- called fiber channel technology. Its main competitor is San Jose, California-based Brocade Communications Systems Inc.
Last year, Ancor shares rose more than 17-fold as investors bet that companies looking to boost the speed and capacity of their computer networks would buy its products.
``They are very early in a very large and rapidly growing market and expectations are very high. My guess is that reality is setting in on investors and some profit-taking is setting in,' said Clinton Morrison, a John G. Kinnard & Co. analyst who rates Ancor a ``buy.' |
