Needham & Company Downgrades Electro Scientific Industries (ESIO) to Hold

November 1, 2013 7:24 AM EDT
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Price: $6.45 --0%

Rating Summary:
    1 Buy, 2 Hold, 0 Sell

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Needham & Company downgraded Electro Scientific Industries (NASDAQ: ESIO) from Buy to Hold as management now sees a down year.

Analyst James Ricchiuti notes, "ESIO reported better than expected FQ2 results but the company's guidance for FQ3 and the full-year was much worse than expected. Management expects revenues to be down sequentially and for the full year to be down 10%, compared with consensus expectations of growth of 12%. The shortfall reflects the timing of orders for its advanced micro-fabrication equipment and flex interconnect tools and slower-than-expected adoption of ESIO's DiamondBlaze tools for cutting strengthened glass. While this could well prove to be a temporary setback in the transformation of ESIO's business, the uncertainty in the timing of orders has prompted us to move to a Hold rating from a Buy."

The firm is cutting FQ3 estimate to a loss of $0.06 from $0.16 on revenues of $43.5M, compared with consensus $67.5M. With losses now expected in both FQ3 and FQ4, full-year non-GAAP EPS estimate goes from $0.45 to essentially breakeven on revenues of $195.3M, compared with a prior estimate of $252M. They are also reducing F15 EPS estimate to $0.33 from $0.70 on revenues of $232.9M, down from our prior $280.5M estimate.

For an analyst ratings summary and ratings history on Electro Scientific Industries click here. For more ratings news on Electro Scientific Industries click here.

Shares of Electro Scientific Industries closed at $11.98 yesterday.

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