STR Holdings (STRI) shares are down sharply this morning after Hapoalim Securities analyst Gordon Johnson cut his rating on the shares to Hold from Buy, with a new target of $19, down from $21.
The move follows the company’s announcement yesterday that it continues to expect 2010 sales of $310 million to $330 million, with non-GAAP EPS of $1.05 to $1.10 a share. STR noted that it is seeing strength in its solar business, but that it has seen reduced orders from clients of its quality assurance business; it expects revenue from the solar segment of $195 million to $205 million and QA sales of $115 million to $125 million.
For Q1, the company continues to expect sales of $77 million to $81 million and non-GAAP EPS of 23-25 cents.
Johnson said the only real incremental information in the update was the weakness in the QA biz; he writes that he had already expected update from its solar segment. He also notes that the lock-up period for a group of private equity investors who hold the stock expires on May 4, creating dilution risk for the shares; he notes that the lock up affects 28 million of the roughly 41.3 million outstanding shares.
STRI is down $1.43, or 6.7%, to $19.95.
Update: A spokesman for STR Holdings points out that the terms of the company’s lock-up basically prevent the sales of any shares covered by the arrangement for another six months after the lock-up expiration – and even at that point, only 50% of the covered shares would be eligible for sale, with the remaining shares subject to sale another 91 days later.
No comments:
Post a Comment