Joe
MERX: FOREST GROVE, Ore., Dec 19 (Reuters) - Merix Corp. (NasdaqNM:MERX - news), a maker of computer circuit boards, on Tuesday reported better than expected earnings, but warned that slowing demand will hurt results in the next two quarters.
Merix shares lost about half their value, falling $12-1/4, or 48.8 percent, to $12-7/8, as they moved closer to their 52-week low of $6-10/16. The Forest Grove, Ore.-based company was the main percentage decliner in the Nasdaq index and among the top net decliners.
``They had a strong November, it was record,'' said John McManus, an analyst with Needham & Company Inc. ``But they lowered their guidance.''
The Forest Grove, Ore., company said earnings for its fiscal second quarter, ended Nov. 25, rose to $10.2 million, or 70 cents a share, from $1.2 million, or 12 cents a share, a year earlier.
Analysts polled by research firm First Call/Thomson Financial had expected a profit of 67 cents a share. Sales for the quarter rose 63 percent to $58.4 million from $35.9 million in the year-ago period.
Merix warned, however, that it expected third-quarter sales of $49 million to $51 million and earnings of 44 cents to 48 cents a share, compared with analysts' projections of 69 cents per share, as compiled by First Call.
``Over the past few weeks, we have seen a reduction in short lead time requests, postponement or cancellation of orders previously placed, and a slowdown in demand from our customers,'' Merix Chief Executive Mark Hollinger said in a statement.
The company also lowered its fourth-quarter estimates.
Sales are now expected to rise about 15 percent and earnings per share to rise about 25 percent from the third quarter. Fiscal 2002 sales are expected to grow 25 percent to 30 percent over 2001, assuming reasonable market conditions.
Merix traded 82 percent down from its Sept. 25 all-time high of $69, but remained more than 60 percent above 1999's close of $7-5/16.
Here is why the gap down. Note the lower expectations by the company for the next 2 Q's. This one will take some time to recover and then will not make it to the 25 area it was at when all of this happened.
Ken |
