Needham Cuts Earnings Estimates for National Instruments
National Instruments (NATI ) sees lower-than-expected third-quarter earnings per share of 11 cents. Needham cut its earnings estimates and price target.
Analyst John Harmon says given the company's high operating leverage, just a $2 million shortfall below the low end of guidance caused an EPS shortfall of 4 cents. He believes much of the shortfall was derived from the automated chip test industry. He says global manufacturing expansion appears to be slowing, noting a fall in global purchasing managers indexes this summer.
Harmon cut his EPS forecasts from 69 cents for 2004 to 61 cents, and $1.00 for 2005 to 90 cents. He cut his $40 price target to $36. He says the upshot is that the downside today offers an attractive entry point; NATI's innovation continues and traditional instruments are becoming an increasingly lower driver of revenues.
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