BWS Financial Downgrades UTStarcom (UTSI) to Hold

February 27, 2009 1:05 PM EST

BWS Financial downgrades UTStarcom (Nasdaq: UTSI) from Buy to Hold. Price target $1.00.

BWS analyst says, "We are downgrading UTSI to Hold and suggesting investors to move to the sidelines. UTSI was able to post better than expected revenues in the fourth quarter and reduce operating expense more than we had anticipated. However, gross margin was approximately 13% for the quarter compared to 31.7% in Q3. The guidance the Company is providing for Q1 was a severe discount to the levels we were forecasting and puts great doubt in UTSI being able to hit the revenue levels that would be required for the Company to turn profitable in 2010. We fear the restructuring steps management continues to make is not addressing the forward view of how much UTSI could generate. It seems as though UTSI is stuck in an endless circle of reducing operating expenses to levels inline with prior performance and not in-sync with current circumstances."

UTStarcom, Inc. designs, manufactures and sells telecommunications infrastructure, handsets and customer premise equipment.

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