Oppenheimer Comments On China Security Earnings

According to Oppenheimer, China Security & Surveillance Technology CSR 1Q11 sales and EPS of $99M and $0.02 were significantly below estimates of $150M and $0.11 and consensus estimates of $149M and $0.11, respectively. Oppenheimer said that sales declined 18% y/y and 54% q/q, reflecting a sharp drop in sales to corporate customers that also resulted in a broad-based decline in sales across product/service segments. “We are lowering our 2011 and 2012 estimates to reflect the company's current business momentum. However, despite poor 1Q11 results and sales momentum, we continue to expect the stock to trade less on fundamentals and more on the progress of the proposed MBO transaction.” China Security & Surveillance Technology closed yesterday at $5.50.