J.P. Morgan Neutral On Powerwave Technologies (PWAV)

J.P. Morgan Chase & Co. has a Neutral rating on shares of Powerwave Technologies (NASDAQ: PWAV) following earnings.

In a note to investors, J.P. Morgan writes, "Q1 results were disappointing. Revenue fell substantially below our forecast due to production delays on new 4G LTE products and a percentage completion accounting adjustment under a multi-year coverage solution project which also added costs to the quarter with no associated revenue. PWAV maintained FY 011 guidance of $650-680M, up 10-15% y/y, and believes Q1's shortfall was not lost but instead pushed into the coming quarters. While we recognize PWAV should benefit from 4G builds in North America and 3G builds in emerging markets we have trouble building an upside case for 2011 as the substantial revenue ramp needed in the coming quarters just to reach the low end of guidance could prove challenging from an operational execution perspective. PWAV trades at a reasonable 15x our FY-12 EPS estimate of $0.28 but a lofty 11x EV / our 2012E EBITDA of $81M. We are maintaining our Neutral rating."

Shares of PWAV closed at $$4.30 yesterday, down 10 cents.