=DJ Superconductor Dn -2: Selloff 'Overreaction,' Hldr Says
By Amy Braunschweiger
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Shares of Superconductor Technologies Inc. (SCON) dropped more than 25% Wednesday, after the company said a falloff in commercial and government revenue would cause first quarter numbers to come in below expectations.
Superconductor - a Santa Barbara, Calif., company that makes equipment to enhance wireless communication - said it expects first quarter revenue of $10 million to $13 million - below Wall Street's average expectation of $17 million.
The company also said it expects to post a loss for the period, as commercial revenue and government research and development revenue drop. Analysts expected the company earn 1 cent a share.
The disappointing outlook accompanied an otherwise positive announcement regarding Superconductor's performance in the last quarter of 2003. The company said it expects to report a fourth-quarter profit - its first ever - on revenue of $16.4 million. Wall Street had anticipated a loss of a penny a share on $16 million in revenues.
Superconductor also said it anticipates recording a profit in 2004.
As for the first quarter outlook, at least one shareholder said investor expectations had gotten aggressive in light of strong quarterly reports and outlooks from telecom players like Nortel Networks Corp. (NT) and Andrew Corp. (ANDW).
"I do think that today is an overreaction," said Simon Hwang, an analyst with Sterling Johnston Capital Management LP, which holds 900,000 Superconductor shares. "With that much optimism built into the stock market, you really need good news to get the stock up."
A Superconductor representative wasn't immediately available for comment.
Shares of the company recently traded at $4.60, down $1.55, on volume of 12.9 million shares, sharply higher than average daily volume of 2 million shares.
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