- UBS notes they reduced PMC-Sierra (NASDAQ:PMCS) estimates on recent negative checks at the ITU Telecom World show suggesting further delays in China's 3G build out, negative mid-Q updates from ALTR and XLNX, wireline capex delays in Japan, and near term PON sales volatility. Firm estimates 50% of PMCS' sales come from telecom/comms end markets.
Firm left 4Q06 ests unchanged but lowered C2007E rev to $455M (vs $475M) and pro forma EPS to $0.27 (option burdened/OB: $0.15) vs. $0.40 (OB: $0.30) previously. They also introduce C2008 ests of $500M and $0.35 (OB: $0.20).
While they still think PMCS has solid positioning in wireless/wireline comms, PON, and enterprise storage equipment, and valuation remains fair, the firm believes upside to PMCS shares is limited until M&A integration activities subside, opex synergies offer margin leverage, and demand trends improve.
Tgt goes to $9 from $11. Reits Buy.
Notablecalls: Expect to see some weakness in PMCS over the next week or so. While there is nothing new in the note the tgt change may bring some sellers.
Firm left 4Q06 ests unchanged but lowered C2007E rev to $455M (vs $475M) and pro forma EPS to $0.27 (option burdened/OB: $0.15) vs. $0.40 (OB: $0.30) previously. They also introduce C2008 ests of $500M and $0.35 (OB: $0.20).
While they still think PMCS has solid positioning in wireless/wireline comms, PON, and enterprise storage equipment, and valuation remains fair, the firm believes upside to PMCS shares is limited until M&A integration activities subside, opex synergies offer margin leverage, and demand trends improve.
Tgt goes to $9 from $11. Reits Buy.
Notablecalls: Expect to see some weakness in PMCS over the next week or so. While there is nothing new in the note the tgt change may bring some sellers.
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