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Monday, January 22, 2007

Calls of Note Part 4

- Oppenheimer notes that in recent channel checks they have been unable to locate any high-end appliance dealers who are selling TurboChef (NASDAQ:OVEN) residential ovens, and very few who even know who TurboChef is. As a result, they conclude that the residential rollout will unfold a bit more slowly than they had previously forecast. Firm is pushing their residential unit shipment estimates out by a quarter, and the result is slightly lower earnings. They reduce 2007 EPS estimate from -$0.15 to - $0.25. Management was careful to comply with reg FD when they contacted them last week and so did not go much beyond what was said in the last conference call. Firm continues to expect that the residential launch will occur eventually, and would note that TurboChef does not need to sell that many units to move the needle on earnings. So they would not be sellers but do continue to rate the shares Neutral.

Opco cutting their 2007 unit shipment forecast for residential ovens from 3,700 units previously to 2,200 units now by pushing each of quarterly unit estimates out one quarter further. This results in a reduction in their residential segment revenue forecast from $14.8 million to $8.8 million in 2007. On a consolidated basis, revenue estimate falls from $97 million to $91 million.

Notablecalls: OVEN has had a nice run over the past 4-5 months and I suspect these comments will cause a pullback in the stock.

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