Deutsche Bank Downgrades Motricity (MOTR) to Hold, Weak Results and Even Weaker Gudiance

Deutsche Bank downgraded shares of Motricity (NASDAQ: MOTR) to a Hold rating from its previous rating of Buy and lowered its price target from $23 to $5.

The company released its Q2 results below expectations with $34.6 million in revenue and EPS of $0.04, below the Street's estimates of $37 million and $0.09. The firm reports that the miss was due to Lower international revenues from longer sales cycles as a result of higher competition, and weakness at home.

MOTR's Q3 revenue guidance is looking for revenues of $32 million, well under the Street's estimate of $45 million.

North American operations has been slowing as AT&T (NYSE: T) and Verizon (NYSE: VZ) spend less on professional services. The companies together made up 59 percent of Motricity's total revenue for Q2 and is forecasted to decline in Q3.

An analyst at Deutsche comments, "The company has eliminated senior management positions and the announced departures of senior executives could dilute management focus. We believe in the mobile marketing opportunity for Adenyo, which is expected to grow 25% to $29b in next 4 years, but view this alone as unlikely to prevent losses/slower growth in core parts of the business."

The firm is currently looking for FY11 sales and EPS results of $131 million and ($0.26) and $140 million and ($0.16) for FY12.

Shares of MOTR are trading down on the day 55.82 percent or $2.54 to $2.01.

For more ratings news on Motricity click here and for the rating history of Motricity click here.

Shares of Motricity closed at $4.55 yesterday.

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