Analyst downgrades Comtech Telecommunications

Analyst sees shares fairly valued and some uncertainty, downgrades Comtech Telecommunications

• On 12:13 pm EDT, Friday September 25, 2009

HARTFORD, Conn. (AP) -- Shares of Comtech Telecommunications Corp. fell Friday as an analyst downgraded the shares, saying they are fairly valued in the face of risks next year and uncertainty in some military contracts.

Broadpoint AmTech analyst Peter Arment downgraded the Melville, N.Y., company to "Neutral" from "Buy."

In a note to clients, he said he is concerned that about 70 percent of earnings next year will be generated in the second half and will depend on a third-party supplier for a military tracking system computer.

Comtech said Thursday it expects a profit of $2.10 per share to $2.20 for fiscal 2010, which ends in July. The company also forecast revenue in the range of $820 million to $840 million.

Arment said the outlook is uncertain for an Army extension of Comtech's Blue Force Tracking radio communications equipment.

He raised his fiscal 2010 estimate to $2.15 per share from $2.07 per share and lowered his fiscal 2011 estimate to $2 per share from $2.88 per share.

Analysts surveyed by Thomson Reuters expect earnings, on average, to be $2.03 per share next year and $2.58 in 2011.

Shares fell $2.04, or 5.7 percent, to $34.03 in midday trading.