Based in Angleton, Texas,
Benchmark Electronics, Inc. (
BHE) provides electronics manufacturing services (EMS) on a turnkey basis. The company offers customized and complete solutions ranging from initial designing to assembling, manufacturing, testing, distribution and volume production. It specializes in engineering services, including product design, printed circuit board layout, prototyping, and test development.
With the computing segment fading faster than expected, Benchmark faces decelerating revenue growth in the coming quarters. Citing an early wind-down of mature projects, the company reported a disappointing second quarter and offered lower guidance for the third quarter, as well.
Although we remain positive on its non-traditional markets where we expect growth of high margin products, we believe that BHE will struggle for the next few quarters. We therefore maintain a Hold rating on BHE shares and lower our six-month price target to $11.00. We also cut our estimates for 2008 and 2009.
