Out of the Gate: Spansion plunges on 1Q results, downgrade
Thursday April 17, 10:21 am ET
Spansion plunges after 1st-quarter results disappoint investors, earning Deutsche Bank cut
biz.yahoo.com
NEW YORK (AP) -- Shares of Spansion Inc. fell sharply Thursday morning as a Deutsche Bank analyst downgraded the semiconductor company, pointing to its first-quarter loss reported late Wednesday.
Spansion shares plunged 55 cents, or 15.9 percent, to $2.90.
Deutsche Bank analyst Bob Gujavarty cut Spansion to "Hold" from "Buy" in a note to investors late Wednesday. The analyst predicted Spansion would not be able to roll out new products quickly enough to offset further revenue declines.
Gujavarty slashed his price target to $3.50 from $7.
Meanwhile, Citigroup analyst Glen Yeung lowered his target to $5 from $7. Yeung said that, although Spansion's revenue was in line with its own previously lowered predictions, higher inventories could shrink its gross margin in the second half of the year.
Yeung widened his loss forecast to $2.33 per share from $1.69 in fiscal 2008. Analysts polled by Thomson Financial expect Spansion to lose, on average, $1.71 per share.
On a more positive note, Lazard Capital Markets analyst Daniel Amir reiterated his "Buy" rating and $5.50 price target on Spansion following the results, saying he expects the company to boost cash flow in the second half of 2008.
"While Spansion remains a controversial story, as the company has accumulated heavy losses in recent quarters, we believe the risk-reward is compelling," Amir said.
Shares of Spansion have fallen more than 75 percent from a 52-week high of $12.67 a year ago. |
