Banc of America cut Cryolife (CRY ) to market perform from buy.
Analyst Kurt Kruger says the FDA sent a warning letter to the company, following months of scrutiny into the company's tissue handling processes after the death of a man who received tissue late last year. Kruger says he believes the deficiencies outlined in the letter will not be overly taxing to address, and should not impact the company's ability to produce tissue. However, the warning makes Cryolife's ability to sell this tissue more uncertain; hence, he downgraded the rating. Although Kruger says he firmly believes Cryolife will correct deficiencies, he feels it is best to move to the sidelines. He cut the 2002 earnings per share estimate to $0.70, and trimmed the 2003 to $1.05.