Wednesday, January 26, 2011

Wait on Mindspeed (NASDAQ:MSPD) Until Revenue Recovery Confirmed Says Needham

Mindspeed (NASDAQ:MSPD) seems to have turned the corner, but Needham suggests investors wait on the sidelines until confirmation revenue recovery for them is a reality.

Needham says, "MSPD reported F1Q11 results in-line with its pre-announcement and guided F2Q11 below consensus but inline with our expectations...With its legacy WAN business likely to stabilize at lower levels and with MSPD’s core CCP and HPA businesses likely to grow in FY11, we believe total revenue has turned the corner after bottoming late in CY10. However, we remain concerned that consensus estimates may be overestimating the revenue recovery over the next several quarters, especially with Transcede not likely to ramp until late FY12. Our FY11 and FY12 estimates remain below the current consensus estimates. As such, we reiterate our rating and would remain on the sidelines until revenue visibility increases."

Needham & Company reiterates a "Hold" rating on Mindspeed Technologies (MSPD), which closed Tuesday at $7.02, up $0.02, or 0.29 percent.

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