Harris Stratex Falls After Weak Results
Thursday January 31, 2:55 pm ET
Harris Stratex Shares Tumble After 2nd-Quarter Results Disappoint, Prompting Downgrade
NEW YORK (AP) -- Shares of Harris Stratex Networks Inc. Thursday tumbled to their lowest level since the company was created a year ago, after the wireless network services provider posted disappointing fiscal second-quarter results.
Morgan Joseph analyst Kevin Dede said while the quarter's sales were strong, they were negatively offset by weaker than expected gross margins and higher-than-expected costs. He downgraded Harris to "Hold" from "Buy."
Dede said stronger sales growth in geographic regions such as Latin America, where pricing pressures are stronger and margins are weaker, pressured the company's overall gross margin.
"Gross margin was hurt further by higher-than-anticipated overseas freight charges and lower service margins related to engineering and installation projects," the analyst wrote.
The company posted a loss of $1 million, or 2 cents per share, on Wednesday after the closing bell, on sales of $181.1 million. Adjusted earnings were 21 cents per share.
Analysts polled by Thomson Financial expected profit of 24 cents per share, excluding items, on sales of $173.7 million.
The company was formed in January 2007 with the combination of Stratex Networks, a maker of digital microwave radios used in wireless communications systems, with Harris Corp.'s microwave communication division.
Dede said he has "less confidence that this fresh company can cleanly navigate the travails of global economic uncertainty, especially considering the string of erratic quarterly results."
Shares fell $3.42, or 24 percent, to $10.91 in afternoon trading and it a year-low of $10.11 earlier in session. The stock has traded between $14.15 and $22.40 in the past 52 weeks.
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...and from TheStreet.com...
Several small-caps had a far more downbeat day. After the close Wednesday, Morrisville, N.C.-based Harris Stratex (HSTX - Cramer's Take - Stockpickr), a maker of wireless networking products, reported non-GAAP second-quarter income of $12.1 million, or 21 cents a share, on revenue of $181.1 million. Analysts polled by Thomson Financial were expecting EPS of 24 cents. Shares broke down 24% to $10.89.
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Harris Stratex Falls After Weak Results
Thursday January 31, 6:52 pm ET
Harris Stratex Shares Tumble After 2nd-Quarter Results Disappoint, Prompting Downgrade
NEW YORK (AP) -- Shares of Harris Stratex Networks Inc. Thursday tumbled to their lowest level since the company was created a year ago, after the wireless network services provider posted disappointing fiscal second-quarter results.
Morgan Joseph analyst Kevin Dede said while the quarter's sales were strong, they were negatively offset by weaker than expected gross margins and higher-than-expected costs. He downgraded Harris to "Hold" from "Buy."
Dede said stronger sales growth in geographic regions such as Latin America, where pricing pressures are stronger and margins are weaker, pressured the company's overall gross margin.
"Gross margin was hurt further by higher-than-anticipated overseas freight charges and lower service margins related to engineering and installation projects," the analyst wrote.
The company posted a loss of $1 million, or 2 cents per share, on Wednesday after the closing bell, on sales of $181.1 million. Adjusted earnings were 21 cents per share.
Analysts polled by Thomson Financial expected profit of 24 cents per share, excluding items, on sales of $173.7 million.
The company was formed in January 2007 with the combination of Stratex Networks, a maker of digital microwave radios used in wireless communications systems, with Harris Corp.'s microwave communication division.
Dede said he has "less confidence that this fresh company can cleanly navigate the travails of global economic uncertainty, especially considering the string of erratic quarterly results."
Shares fell $3.44, or 24 percent, to $10.89 Thursday. The stock earlier hit a year low of $10.11. It has traded between $14.15 and $22.40 in the past 52 weeks. |
