Edelstone again:
Neomagic -2: Morgan Stanley Cites
Near-Term Earnings Risks
Dow Jones Newswires
NEW YORK -- Morgan Stanley Dean Witter analyst Mark
Edelstone downgraded his rating on Neomagic Corp.
(NMGC) Tuesday, citing the company's near-term earnings
risk.
In a research note, Edelstone said production constraints
and competition will impact Neomagic's near-term
earnings results.
"We believe the company's inability to access
leading-edge DRAM capacity has enabled some
competitors to cut into its technological lead, which will
likely lead to a more aggressive near-term pricing
environment," he said.
As a result, the analyst trimmed his earnings projection for
fiscal 2000 ending in January to $1.25 a share from $1.45.
Even though Edelstone expects the company to meet
analysts' consensus estimates of 34 cents a share for the
first quarter ended in April, he anticipates that analysts
will pare down their fiscal 2000 projections following the
quarterly report, which is scheduled for release May 20.
According to First Call Corp., a consensus estimate of
analysts currently puts the company's fiscal 2000 earnings
at $1.41 a share.
Shares of Neomagic, which makes multimedia accelerators
for use in notebook PCs, recently changed hands at 9 5/8,
down 1 1/2, or 13.5%, on Nasdaq volume of 2.4 million
shares compared with a daily average of 779,600. |
