Brean Murray cut its investment recommendation on Arrow International (ARRO ) to hold from accumulate.
Analyst Arnold Kaufman said adjusted fourth quarter results met his expectations, but were slightly below the consensus. He believes shares will be range-bound for the next couple of quarters after initial sell-off. He thinks the company is still capacity-constrained on the manufacturing side, and results in above-normal sales rep turnover and declining gross margin (the company reported below 50%.) He suspended his $38 price target and cut his first quarter earnings per share estimate to 28 cents from 37 cents, his second quarter to 33 cents from 39 cents, his third quarter to 35 cents from 40 cents, his fourth quarter to 36 cents from 42 cents, and his fiscal year 2006 (ending August) to $1.32 from $1.59 on revenue of $488.2 million.