FLOW Likely To Report Inline FQ3 Results
Analyst Eric Stine of Northland Securities maintains his "outperform" rating on Flow International (NASDAQ: FLOW). The target price for FLOW is set to $4.50.
According to Northland Securities, Flow International is likely to report a 4.8% sequential rise and 9.6% Y/Y decline in revenues for Q3 2010. The analysts estimate “gross margin of 40.7%, operating expense (as certain unsustainable costs reductions are phased back in and due to higher depreciation expense) of $18.0M, and EPS of $0.00.” The estimates are in the middle of FLOW’s revenue and gross margin guidance and compares to the consensus of $44.1 million and $0.00 EPS.
Northland Securities expects FLOW’s “Standard segment uptick experienced in 2Q to have continued in 3Q10. Due to improved order trends, and close rates returning to more normalized levels, Flow experienced notable improvement in Standard System sales in North America. Our 3Q10 Consumable Parts revenue estimate is $15.3M, a Q/Q improvement of 4.0%. We believe that because it indicates increased utilization rates (and eventual need for a new system), Consumable revenue is a good indicator of future business. As a result, we expect continued growth in the standard segment going forward. It is important to note that given that 2Q10 Europe Consumable revenue improved Q/Q and was down only (5.0%), we could see a sequential improvement in Europe Standard System sales in 3Q.”
