Harris Stratex hits new low after downgrade
Shares of Harris Stratex Networks (Nasdaq: HSTX) plunged to a new 52-week-low this morning on exceptionally heavy volume after being downgraded to “Neutral” from “Buy” by Merriman Curhan Ford.
Late Tuesday, the Morrisville, N.C.-based Harris Stratex reported non-GAAP pro forma net income of $3.7 million, or $0.06 per basic share, on revenue of $139 million for the third quarter of fiscal 2007 ended March 30.
Six analysts polled by Thomson First Call had estimated earnings per share of $0.21.
By 11:12 am ET, Harris Stratex’s stock had dropped by $4.34, or 21.9%, to $15.50. About 2 million shares had changed hands, compared with an average three-month daily volume of 125,047.
Previously, the stock had traded between $17.05 (on January 29) and $22.40 (on January 31) in the past year.
In January, the Harris Microwave Communications Division ("MCD") merged with Stratex Networks ("Stratex") to create a new company -- Harris Stratex Networks Inc. The company's third quarter results exclude the January 2007 results of Stratex, which preceded the date of the merger.
Harris Stratex President and CEO Guy Campbell said that the revenue momentum that MCD and Stratex had entering the merger “was interrupted more than anticipated during the implementation” of integration plans. He added that the merger has so far been a complex one.
Looking ahead, Campbell said the firm would focus on its research and development programs and introduce expanded functionality.
Harris Stratex designs, manufactures, and sells microwave radios for use in wireless communication networks worldwide.
For the second half of fiscal year 2007, ending June 29, Harris Stratex said it expects non-GAAP earnings of $0.19 to $0.24 per diluted share on revenue in the range between $300 million to $310 million. It estimated non-GAAP earnings guidance for fiscal year 2008 to be in the range of $1.05 to $1.22 per diluted share.
