FBR Capital Downgrades Pike Electric (PIKE) to Market Perform; Awaiting Improved Visibility

November 10, 2009 7:40 AM EST

FBR Capital downgrades Pike Electric (Nasdaq: PIKE) to Market Perform, price target lowered from $15 to $11.

FBR analyst says, "Yesterday, after the close, Pike Electric announced F1Q10 results that were below expectations. Lack of storm revenue coupled with excess costs related to its distribution business being carried during the slower economic period have weighed on recent results. In addition, management withdrew guidance due to uncertainty in the market and its announced cost restructuring efforts. Although we had been upbeat on Pike's initial diversification strategy, we find it difficult to rate the shares an Outperform while visibility appears to have deteriorated. As such, we are downgrading the shares to Market Perform until the restructuring efforts are complete and visibility improves. Our estimates have been reduced, and our confidence level is lower...We are lowering our estimates for CY 2009 and CY and FY 2010 to account for the weak F1Q09 results, restructuring efforts in F2Q09, a slower-than-expected ramp in revenue growth in the near to intermediate term, and uncertain timing on distribution spending by utilities."

To see more analyst ratings on PIKE Click Here.

Pike Electric Corporation and its subsidiaries provide energy solutions for utilities, municipalities, and co-operatives in the United States.

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