Needham & Company maintains a 'Hold' on Comtech Telecom (CMTL); Inline F4Q11 Results; Solid Initial F12 Outlook Likely Not Without Some Risk

Needham & Company maintains a 'Hold' on Comtech Telecom (NASDAQ: CMTL).

Needham analyst says, "Comtech reported 4QF11 results largely inline, but EPS exceeded consensus and our estimates on higher gross margin due to product mix. The initial F12 revenue guidance offered by the company was slightly better than prior consensus, but given the historical choppiness of the SES and RF Amp businesses in challenging macro conditions, we don’t see this guidance as a layup by any means. The one notable delta relative to our views put forth in our recent downgrade of CMTL, has been the emergence of activist shareholder MMI Holdings, which adds a potential, but difficult quantify, wildcard to the mix. For now, given challenging outlook for the company’s core business (notwithstanding recent better bookings) and the overhang from a potential large acquisition, we maintain a Hold." (Needham raises FY12 EPS estimate from $0.87 to $1.21)

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

Shares of Comtech Telecom closed at $27.57 yesterday.

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