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Technology Stocks : iRobot Corp. -- Ignore unavailable to you. Want to Upgrade?

To: deeno who wrote (49)	2/13/2007 1:11:14 PM
From: deeno	Respond to of 88

Morgan IRBT beats est by 4c on lower expenses, maladroit comments with Street apt to contribute to sell-off today: 2006 results were mixed results with sales of $189MM $6MM+ lighter vs. our above guidance ests and EPS of 14c beat our 10c est on 22c lower COGS $119MM vs. 125MMe. Op expenses of $70MM in line while other income of $3.8MM above our $2.6MM clipped 5c of EPS. 2007 sales guidance $225-235MM, +19-24% y/y, lower than our $258MMest but $23-33MM variance can be made up for with a solid defense order. Pretax EBIT guidance surprisingly lower than our projections raises warning flags, which coupled with a sparse earnings release providing little by way of insight or explanation to pre-empt concerns atop active insider selling points to enhanced negative sentiment and we would expect the shares to sell off. Slowing commercial but robust defense demand long-term catalyst: Home robot dels grew 9% in '06 to 725K vs. 12% in '05 (663K units) - well below our 875K est. Clearly, our 2007 projections of 960K are far too high, but we'll await management explanation on the call. Defense, as we long expected, continues to outperform: 2006 Packbot dels of 385 bested our est by 60, +53% y/y vs. 252 in 2005. Gov't & Industrial sales handily bested our ests at $77MM vs. $57MMe, incl $21MM in contract sales. We expect demand for defense products to continue. Implications: 2007 sales guidance is $25MM lower than our thinking, possibly $50MM below consensus expectations but EBIT story is a big question. Stock is apt to sell off today and would be buyers at these levels.