LeapFrog's (NYSE:LF) EPS, Sales Estimates Slashed

Spin it how you like, the pre-announcement by LeapFrog (NYSE:LF) that their EPS and sales will fall far short of guidance will weigh heavily on the company.

Needham tried to sooth the disaster saying, "LF announced that 4Q'10 sales and EPS fell short of guidance and our estimates. We believe weakness in reading products nearly offset strength in Explorer and other products. As a result, 4Q EPS are now expected to be about $0.36 vs. our prior estimate of $0.56. This still leaves 2010 with positive EPS, but well below our forecast. We are reducing our 2011 and 2012 estimates to reflect lower assumed sales and margins. With EPS in 2012 expected to be about $0.50, and $1.35 per share or so in net cash, we see still substantial upside for LF in the next year, but have cut our target from $8 to $7...We have lowered our 20011 EPS estimate from $0.60 to $0.25, and our 2012 EPS estimate from $0.85 to $0.50. In each year, we expect sales to grow around 12%, but off the lower base in 2010."

Needham reiterates their "Strong Buy" on LeapFrog, which closed Thursday at $4.31, up $0.09, or 2.13 percent. Needham lowered their price target on LeapFrog from $8 to $7.