Canaccord Genuity Downgrades Spreadtrum Communications (SPRD) to Hold Post Q3

Canaccord Genuity downgraded Spreadtrum Communications (NASDAQ: SPRD) from Buy to Hold following Q3 results. Price target cut from $22 to $20.

The firm comments, "Spreadtrum reported solid Q3/12 results but issued sales guidance below our expectations when factoring the unexpected continuation of their product acceptance programs and deferred revenue. Further, despite guidance for Q4/12 smartphone solution sales to increase 64% sequentially to 18M units, Spreadtrum management guided to sequentially flat Q4/12 gross margin. Going forward, we believe pricing pressure in both the 2G feature phone and EDGE smartphone markets, increased TD-SCDMA smartphone competition, and higher operating expenses given Spreadtrum's aggressive roadmap will result in lower
margins than our previous expectations. As such, we are lowering our estimates and our price target to $20. We are downgrading to HOLD from Buy."

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

Shares of Spreadtrum Communications closed at $21.33 yesterday.

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