Jefferies Cuts Target on EZchip (EZCH) to $35, Adjusts EPS Numbers Following Q3 Results
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Price: $25.49 --0%
Rating Summary:
5 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
Rating Summary:
5 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 17 | Down: 14 | New: 17
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Jefferies commented on EZchip Semiconductor (Nasdaq: EZCH) following third-quarter results. The firm cut its price target from $37 to $35, and maintained a Hold rating on the stock.
EZchip reported third-quarter non-GAAP earnings of 35 cents per share, beating the Street and Jefferies expectation for 32 cents per share. Looking ahead, however, EZchip said it expects fourth-quarter revenue to decline 25 to 30 percent sequentially, lower than expectations calling for 8 percent growth.
Further, pre-production NP4 numbers indicate that the expected cycle is playing out. Jefferies comments, "We expect the ongoing transition in the Metro portion of the network to Carrier Ethernet Switching and Routing (CESR) from legacy circuit switched technology, to drive a greater need for higher-speed NPUs, particularly as adoption of 10-Gigabit Ethernet (10GE) accelerates."
Management also said the company would "sample its next-generation NP5 NPU in late-2012, and start accruing royalty revenues from its new lower-end NPU (NPA0) targeting the Access market in 2012."
On the results, Jefferies is trimming some numbers. Fiscal 2011 EPS moves from $1.17 to $1.06, 2012 from $1.39 to 92 cents, and 2013 from $1.67 to $1.28.
For more ratings news on EZchip Semiconductor click here and for the rating history of EZchip Semiconductor click here.
Shares of EZchip Semiconductor closed at $31.81 yesterday.
EZchip reported third-quarter non-GAAP earnings of 35 cents per share, beating the Street and Jefferies expectation for 32 cents per share. Looking ahead, however, EZchip said it expects fourth-quarter revenue to decline 25 to 30 percent sequentially, lower than expectations calling for 8 percent growth.
Further, pre-production NP4 numbers indicate that the expected cycle is playing out. Jefferies comments, "We expect the ongoing transition in the Metro portion of the network to Carrier Ethernet Switching and Routing (CESR) from legacy circuit switched technology, to drive a greater need for higher-speed NPUs, particularly as adoption of 10-Gigabit Ethernet (10GE) accelerates."
Management also said the company would "sample its next-generation NP5 NPU in late-2012, and start accruing royalty revenues from its new lower-end NPU (NPA0) targeting the Access market in 2012."
On the results, Jefferies is trimming some numbers. Fiscal 2011 EPS moves from $1.17 to $1.06, 2012 from $1.39 to 92 cents, and 2013 from $1.67 to $1.28.
For more ratings news on EZchip Semiconductor click here and for the rating history of EZchip Semiconductor click here.
Shares of EZchip Semiconductor closed at $31.81 yesterday.
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