Wedbush Reiterates an Underperform on O2Micro (Nasdaq: OIIM); Lowers PT on Disappointing Outlook

November 5, 2009 10:20 AM EST

Wedbush reiterates an Underperform on O2Micro (Nasdaq: OIIM), price target lowered from $6 to $4.

Wedbush analyst says, "Our take: O2Micro reported a poor 3Q with revenue of $36.7mn, below the midpoint of guidance, with higher litigation expenses which resulted in an EPS miss. Revenue guidance for 4Q of -10% QoQ at the midpoint was well below expectations and short of seasonality. Although GMs were above the target range at 60.6% in 3Q and expected to remain at the upper-end going forward, we struggle with management's decision to bolster margins at the expense of revenue growth - particularly at these levels...Disappointing guidance: O2Micro guided revenues to a midpoint of $33.0mn (-10.0% QoQ), below normal seasonality due to conservatism by its customers and sluggish PCI-e sales. Solid consumer offset by computing and industrial slowdown: Sales in consumer (50% to 55% of sales in 3Q) grew significantly once again due to robust demand for LCD TVs, especially in China."

To see more analyst ratings on OIIM Click Here.

O2Micro International Limited, a fabless semiconductor company, designs, develops, and markets semiconductor components for power management and security applications.

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