Powerwave Technologies Inc.'s stock fell 16% Monday after an analyst said the Irvine maker of amplifiers for wireless-telephone networks faces increased competition and delays as the wireless industry shifts to newer products.
The stock fell $7.31 a share to $39.75 in Nasdaq trading of 6.25 million shares, about three times the three-month daily average volume.
The shares were cut to "hold" from "buy" by analyst Jeffrey Schlesinger of UBS Warburg. He said the amplifier industry is becoming more competitive, as products from Spectrian Corp. and Ericsson AB's Microwave Power Devices Inc. gain acceptance. He also cited the fact that the industry is moving to newer products.
"The downgrade is due to our belief that there's increased risk this year associated with industry transition issues, as well as a competitive landscape," Schlesinger said in an interview.
Powerwave makes amplifiers for cellular phone base stations, the hubs that send and receive wireless signals.
"It doesn't change our view that they're still the premier merchant supplier of base-station power amplifiers in the industry today," he said.
Schlesinger said he expects the shares to reach $51 in the next 12 months, down from an earlier forecast of $63. Despite Monday's loss, the shares have gained 30% over the last year.