Needham & Company Remains Sidelined on Cubic Corp. (CUB) After Updating Estimates

Needham & Company reiterated a Hold rating on Cubic Corp. (NYSE: CUB) after making adjustments to estimates for tax rate reasons. 3Q EPS estimates were lowered to $0.28 from $0.35. However, the tax rate is expected to drop in the 4Q, and Needham has increased EPS estimates for the September quarter to $0.84 from $0.77.

Analyst James Ricchiuti commented, "We are making adjustments to our F2H EPS estimates mainly for tax rate reasons and with no overall impact for the full year. We are also trimming our rev estimates for the Q4 and F17 to reflect the Fx impact from the drop in the pound. About 18% of CUB’s revs are generated in the UK, mostly from the transportation business; however, as the bulk of the costs related to these revs are also pound-denominated, we see no real impact on F17 EPS. There continues to be noise in CUB’s numbers from other factors, including investments in a new ERP system, costs to related to the OneCubic supply chain initiatives and acquisition-related costs for the new C4ISR businesses. We remain at a Hold, but note that there are number of positive demand and margin-related developments that could provide upside over the next 1-2 years."

For an analyst ratings summary and ratings history on Cubic click here. For more ratings news on Cubic click here.

Shares of Cubic closed at $38.30 yesterday.

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