Novatel shares plunge after 4th-quarter outlook disappoints despite strong 3rd quarterBy AP
Friday, October 30, 2009
Novatel shares tumble after 4Q outlook disappoints
NEW YORK — Shares of Novatel Wireless Inc. tumbled Friday after the wireless high-speed Internet service provider posted a disappointing outlook for the fourth quarter.
Novatel’s third-quarter results reported Thursday were strong, topping analyst estimates. But investors spooked by the fourth-quarter outlook sent shares down $3.32, or 27.3 percent, to $8.87 Friday afternoon. In the past 52 weeks, the stock has traded between $2.81 and $13.70.
Strong sales of Novatel’s MiFi personal Wi-Fi hotspot device took off, boosting profit in the third quarter. But Novatel projected fourth-quarter income between 4 cents and 12 cents per share. The midpoint of that range, 8 cents per share, is below the 10 cents per share projected by analysts polled by Thomson Reuters.
Craig-Hallum Capital analyst Anthony Stoss said the company’s guidance was weak and lowered his share price target to $13 from $14, but reiterated a “Buy” rating on the stock.
The analyst said while he is “hopeful the applications for MiFi will generate buzz and increase stickiness, we have yet to see any real application launches from its customers.”
Stoss estimated that the company sold about 200,000 MiFi units during the quarter.
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