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CIBC World Upgrades LCC to 'Sector Outperform'


CIBC World upgraded LCC International (LCCI) to sector outperform from sector perform.

On Tuesday the telecom-equipment company posted a 19-cent second-quarter loss (GAAP) on 49% higher revenue. Analyst Earl Lum says gross margin rose to 18.3% in the second quarter from 14.8% in the first quarter. He says management continues to provide limited guidance, noting that sales should continue to grow, and LCC should approach breakeven in the third quarter and return to profitability in the fourth quarter.

He thinks LCC's backlog of more than $150 million, up 90% sequentially, supports his expectation for strong third-quarter growth. He upped the $81.4 million 2003 revenue estimate to $105 million, and upped the $100 million 2004 revenue estimate to $140 million.

Lum also narrowed the 45-cent 2003 loss to a 33-cent loss, and raised the 4-cent 2004 loss to 27 cents earnings per share. Finally, Lum set a $6.85 target.


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