Analysts (and Investors) Abandon Emulex

Earnings came in at $0.15 per share, but the GAAP loss after items was $0.09 per share after a Broadcom Corp. (NASDAQ: BRCM) settlement. Third-quarter revenue was a mere $109.7 million. We had a Thomson Reuters consensus of $0.15 earnings per share (EPS) and closer to $113 million in revenue.

Where things get worse is in guidance. Fourth-quarter revenues were put at $94 million to $104 million. The consensus was closer to $115.67 million, but even that consensus revenue estimate was going to be a drop of 4% in sales from a year earlier. The company’s guidance is for earnings to be from breakeven to as high as $0.05 — far shy of the $0.18 EPS consensus.

Analysts have blasted the company. RBC Capital Markets had only a Sector Perform rating, but the target was cut to $7 from $8. Piper Jaffray cut its rating to Neutral from Overweight, and the price target was slashed to $6 from $10. The boutique firms also downgraded Emulex, to Equal Weight from Overweight at Stephens and to Underperform from Buy at D.A. Davidson.

ALSO READ: Companies With the Best (and Worst) Reputations

Emulex shares were down 26% at $5.27 on almost 5 million shares in mid-morning trading on Thursday. The stock also hit a 52-week low of $4.98 on Thursday.

This company’s trend is no friend for its investors. About the only good news seen was that the current litigation process between Emulex and Broadcom has effectively ended.