Nu Horizons Electronics lowers Q1 profit
Shares of Melville, N.Y.-based Nu Horizons Electronics Corp. (Nasdaq: NUHC) are down following news that the distributor of advanced technology active components and systems lowered its quarterly profit despite a rise in sales.
The net income for the first quarter of fiscal 2007 ended May 31 was $1.81 million, or $0.10 per share, compared with net income of $3.18 million, or $0.17 per share, during the same three months of 2006, the company reported before the start of trading. Three analysts polled by Thomson Financial were projecting earnings of $0.14 per share.
On the flip side, net sales surpassed expectations and hit $192.33 million, up 2.4% from net sales of $187.76 million a year earlier. Wall Street was calling for sales of $188.33 million.
Despite the profit decline, CEO and board chairman Arthur Nadata is optimistic.
“We are continuing with our global growth strategy and we are enthusiastic about the completion of our acquisition in Germany which provides Nu Horizons with an opportunity to achieve significant growth in Europe, particularly in the German marketplace,” Nadata said.
On June 6, Nu Horizons Electronics announced that it purchased Munich-based electronic component distributor Dacom-Süd Electronic Vertriebs, signaling its expansion into the German market. The company first entered the European market through its August 2006 acquisition of DT Electronics in the UK.
“The move into Germany is definitely a positive,” said Amit Dayal, a senior technology analyst with investment bank Rodman & Renshaw, LLC. “Growth is going to come from expansion in Europe and Asia.”
Rodman & Renshaw has a “market outperform” rating on the stock.
At 1:41 p.m. ET shares were down $1.57, or 12%, to $11.85. The 52-week high of $14.84 was established on Aug.31, 2006. The 52-week low of $8.61 was set on Jan. 10.
