Shares of Globecomm fall after profit decline

Shares of Globecomm Systems down after company reports 4Q profit decline

• On 1:27 pm EDT, Thursday September 10, 2009

HARTFORD, Conn. (AP) -- Shares of Globecomm Systems Inc. fell Thursday, a day after the satellite communications company reported a steep profit decline for its fiscal fourth quarter compared with the same period last year when a lower deferred tax allowance buoyed results.

Revenue fell nearly 13 percent, to $49.2 million, compared with $56.4 million in the same period in 2008, hurt by a 39 percent decline in its infrastructure solutions business.

Analyst James McIlree of Collins Stewart said in a client note Thursday he will "remain on the sidelines" until he sees increased orders for the Hauppauge, N.Y., company's infrastructure business.

"The infrastructure business remained sluggish, continuing to see the economy's impact on both commercial and government orders," he said.

Looking ahead, Globecomm said it expects earnings between 30 cents and 35 cents per share on revenue of $215 million to $225 million in fiscal 2010.

McIlree cut his fiscal 2010 estimate to 30 cents per share from 37 cents per share on higher revenue of $213 million, up from a previous estimate of $186 million.

He said he expects modest growth in infrastructure sales of 3.6 percent, but an increase of 49 percent in services.

Globecomm said net income for the quarter slid to $1 million, or 5 cents per share, for the three months ended June 30. That's a 94 percent decline from profit of $16.9 million, or 82 cents per share, in the same period last year. The year-earlier period included 62 cents per share related to a noncash reduction in the company's deferred tax asset valuation allowance.

Shares fell 38 cents, or 4.6 percent, to $7.81 in afternoon trading.

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