American Reprographics Looks For Stabilization Following Earnings Results

On Wednesday evening, American Reprographics ARP reported 3Q10 results, which were broadly as negatively pre-announced in mid-October. Revenues were $109mn and adjusted EPS (excluding the goodwill impairment charge) was $0.01. Although the company continues to be hopeful that the reprographics market is bottoming out as signs of stabilization emerge, J.P Morgan notes that ARP mgmt has been optimistic for the past several quarters now. ARP's 3Q10 revenues declined 5% sequentially to $109mn as clients continue to postpone new construction activity given the heightened uncertainty in the current economy. JPM believes customers may defer their outstanding projects until 2011 as we enter into the winter months when construction activity naturally slows. J.P Morgan remains Neutral on ARP with a $6 PT ARP closed Tuesday at $7.29