Monday, January 31, 2011

Microsemi's (NASDAQ:MSCC) GAAP Operating Margins Remain Low, EPS Slashed by Wells Fargo (NYSE:WFC)

Microsemi Corporation (NASDAQ:MSCC) had their EPS estimate slashed by Wells Fargo (NYSE:WFC) on low GAAP operating margins, and were also downgraded by the giant bank.

Wells says, "Microsemi's high reliability business has, in
our view, good long term visibility as a result of the relative stability of the defense, satellite and medical markets. The company also has substantial breadth of commercial markets. Microsemi has established a good track record of integrating acquisitions, consolidated manufacturing operations and reducing costs. However, GAAP operating margins remain relatively low...For FY2011, we decreased our EPS estimate to $0.51 from $0.74 per share and we similarly decreased our FY2012 EPS estimate to $0.99 from $1.27."

Wells Fargo downgraded Microsemi Corporation (MSCC) from
"Outperform" to "Market Perform." Microsemi closed Friday at $22.35, losing $1.33, or 5.62 percent. Wells has a valuation range of $22-$27 on MSCC.

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