This analyst is not as harsh as he could be...
Thursday October 19, 10:45 am Eastern Time
Westell shares fall 28 percent on Q2 earnings
CHICAGO, Oct 19 (Reuters) - Shares of Westell Technologies Inc. (NasdaqNM:WSTL - news) fell about 28 percent to near an 18-month low on Thursday, after the telecommunications equipment firm reported lower-than-expected earnings and lowered its guidance through fiscal 2002.
Westell's stock was off $2-1/2 at $6-1/2 in early trade on Nasdaq volume of 3.1 million shares. Its 52-week high was $40-12/16. Shares traded as low as $6-3/8.
The company, which makes high-speed DSL (digital subscriber line) modems, had reported fiscal second-quarter pro forma earnings late Wednesday of $483,000, or a penny a share. This was far below analysts' consensus estimate of 8 cents a share, according to First Call/Thomson Financial, which tracks such earnings data.
Analysts said the company was affected by DSL industry issues as well as integration issues related to its acquisition of Teltrend. ``There are some macro issues surrounding the roll-out of DSL that impacted them (such as) installation issues and demand issues,'' Greg Mesniaeff, analyst with Robinson-Humphrey, said.
Mesniaeff said Westell has encountered a disruption in production due to its inability to integrate Teltrend as smoothly as the company had hoped.
Its gross margins also hurt results because Westell had to pay higher-prices to buy components on the spot-market, he said. Mesniaeff downgraded Westell to outperform from buy.
However, Ted Moreau, analyst with Robert W. Baird, said he believed Westell was still a good investment in the long term.
``It's a near-term problem, but we think it's resolvable. We think it may be a dead stock near term but still attractive long term,'' he said.
``We expect as we move on into calendar year 2001 that we will see the DSL ramp returning. They (Westell) are expanding their product line and reinvesting in their business,'' he said. |
