UPDATE 1-RESEARCH ALERT-Analysts downgrade Novatel
(Recasts, adds details, share movement)
April 15 (Reuters) - Three brokerages downgraded Novatel Wireless Inc NVTL.O on Tuesday, a day after the maker of equipment used by wireless broadband carriers cut its first-quarter outlook.
Analyst Arinder Mahal with Dundee Capital Markets said in a research note that Novatel's disappointing performance was a result of poor execution on multiple levels -- new product launches, sales management, and operations.
Mahal downgraded the company to "sell" from "neutral".
Novatel cut its outlook on Monday citing delay in the launch of a mobile broadband USB modem with a major European carrier customer and lower-than-expected sales of its enterprise-class MC727 USB products to a major customer.
S&P Equity Research, which downgraded the company to "hold" from "buy," said Novatel's gross margin was lower than expected due to a product shift.
The brokerage said Novatel will continue to struggle in the highly competitive industry.
"With current products aging and new products not expected until the third quarter we do not see the situation changing over the short term," Dundee's Mahal said.
Mahal also sees Novatel's second quarter to be disapointing as it expects the company to continue to lose market share at not only its largest customer Verizon (VZ.N: Quotazione) but also at Sprint (S.N: Quotazione).
Oppenheimer also downgraded the company to "perform" from "outperform".
Shares of the company were down about 22 percent at $7.82 in afternoon trade on Nasdaq. They had touched a year-low of $7.65 earlier in the session. (Reporting by Swagata Gupta in Bangalore; Editing by Jarshad Kakkrakandy) ((email@example.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: firstname.lastname@example.org))
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