Houston Wire & Cable Fairly Priced - Analyst Blog
Houston Wire & Cable Company (
HWCC) reported third quarter EPS of $0.37, well below our estimate of $0.47 and down 9.8% from the year-ago level of $0.41, on account of lower gross margin and higher operating expenses, partially offset by share repurchases.
Third quarter sales were negatively impacted by hurricanes in the company's Gulf Coast operations. For the full year 2008, management lowered its earnings guidance to $1.30-1.40 from the previous guidance range of $1.60-1.75 per share due to slowdown in the economy, the hurricane impact, and declining commodity prices.
Our Hold recommendation is maintained on Houston Wire & Cable stock at this time. At a forward P/E multiple of about 5.2x our 2009 EPS estimate, our price target is $6.00 per share.
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