Goldman Sachs downgraded SPX Corp. (SPW) to in-line from outperform.
Analyst Jack Kelly says although the $3.41 2003 earnings per share from continuing operations was in line with his $3.40 estimate and management's guidance of "at least $3.40," he believes one-time charges taken at year-end didn't fully offset the 34 cents gain from the Microsoft settlement. Kelly says this suggests fourth-quarter operating earnings per share fell short of expectations.
Also, he notes SPX, which makes power transformers, antennas, and industrial equipment, provided $3.41 to $3.60 2004 guidance, vs. his $3.90 estimate and consensus $3.85 estimate. He believes lower than expected 2004 guidance reflects: 1) a lower operating earnings base for 2003; 2) a 2004 forecast that assumes no organic growth. Kelly cut the $3.90 2004 earnings per share estimate to $3.55.