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Strategies & Market Trends : Trend Setters and Range Riders -- Ignore unavailable to you. Want to Upgrade?

To: Connor26 who wrote (3824)	11/9/2001 7:24:46 AM
From: kendall harmon	Read Replies (2) \| Respond to of 26752

CIMA, why the pullback, two reasons. One is fundamental concerns. A Dow Jones excerpt: S.G. Cowen & Co. analyst Ian Sanderson lowered his rating on Cima to buy from strong buy, citing concern about lower-than-expected Remeron sales and royalties on Zomig-ZMT. "Both products were adversely impacted by higher-than-expected inventory levels" in the third quarter, Sanderson wrote in a note. He attributed the backup to slower conversion rates to a faster-dissolving dosage form. He also said gross margins on product sales were well below his forecasts, "due to heavy production of the lower-margin Triaminic over-the-counter line." Over-the-counter product revenue accounted for 64% of total product revenue for the quarter, compared with 50% in the prior quarter, Sanderson advised clients. "Hence, overall profit and loss quality was considerably weaker than anticipated" in the third quarter, he concluded. Although the company didn't provide earnings guidance for 2002, the Cowen analyst lowered his estimates for the year. He now anticipates revenue of $60 million, down from $67 million, and earnings of $1.20 per diluted share rather than $1.30 previously. The consensus estimate is $1.36. "This was a pretty high P/E stock prior to (Thursday)," Sanderson said. "There are enough interim inventory issues that quarterly earnings expectations won't be as steady as we had hoped." The second reason is that the momo boys are exiting big time. Tc2000 called CIMA a short earlier this week on a technical basis.