WMS Industries falls partly on 1Q revenue miss

WMS Industries drops on 1st-quarter revenue miss, disappointing 2nd-quarter outlook

• On 11:29 am EDT, Tuesday October 27, 2009

NEW YORK (AP) -- A first-quarter revenue miss and disappointing second-quarter revenue guidance pulled shares of WMS Industries Inc. lower on Tuesday.

Late Monday the casino equipment maker reported quarterly revenue climbed 9 percent to $165.3 million but fell short of the $168 million analysts surveyed by Thomson Reuters expected.

The company, which is based in Waukegan, Ill., also provided a second-quarter revenue outlook of $184 million to $190 million. The forecast is below analysts' estimates for quarterly revenue of $195.6 million.

JPMorgan's Joseph Greff said in a client note that the revenue shortcomings, combined with earnings results that were not as good as hoped for, prompted a sell-off late Monday. But the analyst pointed out that the quarter is typically a slow one for WMS and said he would buy shares on any weakness "given what should be improved domestic replacements starting in calendar 2010 and, for WMS specifically, continued traction with innovative new products and newer markets."

Greff reiterated an "Overweight" rating and $54 price target.

WMS reported a second-quarter profit of 34 cents per share and adjusted earnings of 36 cents per share, which met analysts' estimates.

"Overall WMS's quarter was okay, but it appears (analyst) estimates may have gotten a little ahead of themselves," Robert LaFleur of Susquehanna Financial Group wrote. He maintained a "Positive" rating.

The company's stock fell $4.38, or 9.2 percent, to $43.02 in midday trading. The shares have traded in a 52-week range of $15.48 to $50.11.

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