Raymond James Cuts Metrologic Instruments

Analyst Chris Quilty says the imaging and scanning products company is reducing its European workforce and expansion efforts after a second-quarter recovery failed to materialize

Raymond James cuts imaging and scanning products company Metrologic Instruments (MTLG ) to market perform from strong buy.

Analyst Chris Quilty says the company cites ongoing weakness in European data capture business and an unexpected slowdown in industrial Automation segment.

He says while management believed sales in the European data business would improve in the second quarter and beyond, the recovery has failed to materialize. The company is reducing its European workforce and expansion efforts in region.

Quilty cuts his second-quarter earnings per share and revenue estimates to 17 cents and $46.9 million, and 2005 earnings per share and revenue estimates to 83 cents and $200 million respectively.

The stock may appear cheap, but in the absence of a clear catalyst, it is unlikely to stage a sustained rally anytime in the near future.

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