NED Needs Time To Spark Sales Activities

Noah Education Holdings, Ltd. (NYSE: NED) reported disappointing 4Q results due to its struggle to fix its ELP business distribution channel problems, Oppenheimer reports.

EPS was down $0.32, below Oppenheimer's estimate of $0.03, thanks to significantly lower ELP revenue (-72% y/y), negative gross margins and higher SG&A expenses, offsetting growth in the emerging educational services business.

Oppenheimer believes NED needs several quarters to rejuvenate sales activities, and thus stock is expected to remain range-bound in near-to-mid terms. FY2011 EPS is estimated at $0.09 by Oppenheimer.

Oppenheimer maintains its Perform rating for Noah Education Holdings, Ltd. which closed yesterday at $1.91.