Eon Communications Corp. (EONC)

[Rustler]

THE STREET CUTS EONC OFF AT THE KNEES...

RECOMMENDATION
We rate EON COMMUNICATIONS CORP (EONC) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

HIGHLIGHTS
EON COMMUNICATIONS CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, EON COMMUNICATIONS CORP swung to a loss, reporting -$0.44 versus $0.22 in the prior year. The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. EONC's net income has significantly decreased to a crippling loss of -376.5% when compared to the same quarter one year ago, falling from $2.38 million to -$1.06 million. Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, EON COMMUNICATIONS CORP's return on equity significantly trails that of both the industry average and the S&P 500. The gross profit margin for EON COMMUNICATIONS CORP is rather low; currently it is at 20.40%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -16.80% is significantly below that of the industry average. Net operating cash flow has significantly decreased to -$0.28 million or -118.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Damn it... just give me my bag and an "L" on my forehead. :(