Zacks Investment Research downgraded
Key Technology, Inc.
) to a Zacks Rank #5 (Strong Sell) on March 16, 2013.
Why the Downgrade?
The company's poor financial results in the fiscal first quarter
2013 (ended December 31, 2012) seem to be the prime reason behind
the rank downgrade for Key Technology. The company reported a
loss in the quarter that came in at 16 cents per share, worse
than a 5 cent loss reported in the year-ago quarter and 220%
below the Zacks Consensus Estimate of a loss per share of 5
Sales plummeted 23.5% year over year to $19.9 million. Fall in
sales, despite being partially offset by lower cost of sales, led
to a decline of 24.3% in gross profits that settled at $6.5
million. As a percentage of sales, operating expenses grew from
33.8% in the year-ago quarter to 38.9% in the fiscal first
The financial results for the quarter along with three quarters
of negative earnings surprise out of four trailing quarters, with
a negative earnings surprise of 72.7%, have raised skepticism
over the financial health of Key Technology.
A ray of hope still remains, however, in the acquisition of Visys
NV, a supplier of innovative digital sorters, by Key Technology.
The transaction is valued at $21 million and is likely to be
accretive to the company's earnings in the first twelve months of
Other Stocks to Consider
Other stocks to watch out for in the industry are
Columbus McKinnon Corporation
), with a Zacks Rank #1 (Strong Buy) while
Campbell Soup Company
ConAgra Foods, Inc.
) each has a Zacks Rank #2 (Buy).
CONAGRA FOODS (CAG): Free Stock Analysis
COLUMBUS MCKINN (CMCO): Free Stock Analysis
CAMPBELL SOUP (CPB): Free Stock Analysis
KEY TECHNOLOGY (KTEC): Free Stock Analysis
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