Piper Jaffray Lowers Estimates/Price Target on Advanced Analogic Technologies (AATI) to $6.40

July 3, 2008 8:28 AM EDT

Piper Jaffray lowers their price target on Advanced Analogic Technologies (NASDAQ: AATI) from $8.25 to $6.40 and maintains their Buy rating. The firm lowers their FY08/09 EPS estimates from $0.19/$0.12 to $0.39/$0.27.

The firm said, "AATI negatively pre-announced Q2 results after the close. Revenue is now expected in the $20.5 - $21.5 million range, below our recently reduced $23.1 million estimate, and $23.4 million consensus. The company cited continued weakness in China handset sales. We believe the company has been impacted by excess inventory, short term delays in the roll out of new handsets by key customers (we think the "Soul" from Samsung, and certain LG handsets) and general softness in its end markets. These trends are consistent with our checks from mid-June. However, it appears the weakness that we identified a few weeks ago has continued and likely accelerated toward the end of June."

The firm also highlighted various expenses that will adversely impact AATI's financial results. The expenses include an excess inventory charge of $0.8 - 1.2 million, $0.4 million severance charge due to the departure of its former COO, and an in-process R&D charge of $0.3 million related to its Elite Micro Devices acquisition.

Advanced Analogic Technologies, Inc. (AnalogicTech) is a supplier of Total Power Management(TM) semiconductor solutions for mobile consumer electronic devices, such as wireless handsets, notebook and tablet computers, smartphones, digital cameras, wireless LAN, and personal media players.

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