Shares of Cogent Inc. rose Wednesday after the biometric identification company said its fourth-quarter profit fell as product revenue dropped, but earnings still beat analysts' expectations.
Cogent shares rose $1.30, or 14.1 percent, to $10.52. In the past year, the stock has traded between $8.88 and $17.02.
Late Thursday, the South Pasadena, Calif.-based company said it earned 8 cents per share on $21.9 million in revenue.
Analysts polled by Thomson Financial expected earnings of 7 cents per share on $23.6 million in revenue.
Analysts' reactions to Cogent's report were mixed, with some expressing concerns about the company's revenue miss and its 2008 prospects while others seeming pleased with the company's results and visibility into the coming year.
In a note to investors, Needham Co. analyst Scott Zeller kept his "Hold" rating for the stock, saying the company's fourth-quarter revenue missed his expectations.
He noted that its 2008 outlook for $120 million in revenue and 41 cents to 44 cents per share in earnings is below his and Wall Street estimates. Still, Zeller said earnings performance for the year "should be respectable, given a continued shrinking of operating expenses."
As for Cogent's shares, he sees limited downside but said he continues "to have reservations due to a continued deteriorating top-line."
Meanwhile, Jefferies & Co. analyst Matthew G. McKay kept his "Buy" rating and $15 price target for the stock in a Wednesday note to clients, saying Cogent's fourth-quarter results were mixed but its $140 million backlog is strong and its outlook healthy.
"The vast majority of backlog should convert into revenue over the next 18 months, offering healthy visibility during 2008," he said, adding that "the breadth of the customer base has improved dramatically with a much larger number of customers driving growth."
McKay raised his 2008 operating earnings-per-share estimate to 42 cents from 38 cents, expecting better-than-anticipated gross margins and lower operating expenses.
He said Cogent's management guided for 2008 revenue of about $120 million, but current and new customers could result in the potential for more.
Morgan Keegan & Co. analyst Brian W. Ruttenbur reiterated his "Outperform" rating for the stock in a client note, citing opportunities the company has, along with ongoing "aggressive" stock repurchases and its fairly cheap valuation.
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