Zacks Bull and Bear of the Day Highlights: Sierra Wireless, Tollgrade Comm., BorgWarner, deCODE genetics and Sohu.com

Business Wire, May 5, 2008

CHICAGO -- Zacks Equity Research highlights Sierra Wireless (Nasdaq: SWIR) as the Bull of the Day and Tollgrade Communications (Nasdaq: TLGD) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on BorgWarner (NYSE: BWA), deCODE genetics, Inc. (Nasdaq: DCGN) and Sohu.com (Nasdaq: SOHU). Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day: Sierra Wireless (Nasdaq: SWIR)

Sierra Wireless, a leading provider of OEM wireless modem cards and access solutions, announced impressive first quarter of fiscal 2008 financial results that exceeded the company's own guidance. Precipitous demand and requirements for next-generation wireless data cards, USB modems, and PC embedded modules that connect to the rapidly implemented 3G wireless networks were enabling factors for encouraging growth. This is supported by newly launched HSUPA AirCards which achieved prodigious market acceptance in different geographies.

Also, the proposed acquisition of Cradlepoint, Inc. is expected to further solidify the company's position in the mobile broadband networking market. We maintain our Buy recommendation with a higher valuation target as we assess Sierra Wireless' ability to maintain a strong market position with long-established business channels as the company provides multiple products to a large number of major wireless carriers.

Bear of the Day: Tollgrade Communications (Nasdaq: TLGD)

We downgrade our recommendation to a Sell for Tollgrade, a provider of telecom testing and software solutions to carriers, as a result of expected demand weakness for the company's core products. First quarter 2008 financial results of Tollgrade were disappointing, well below our estimates. We believe market demand for the company's cable hardware & software products, along with Metallic Channel Unit (MCU) products, will remain tepid for the remainder of the fiscal year.

Several business opportunities have been deferred indefinitely as a result of restrictive capital spending on the part of the telecom service providers. Furthermore, it is our opinion that the company is challenged with developing new products that may generate a potential turnaround over the next six to twelve months.

Latest Posts on the Zacks Analyst Blog:

BorgWarner (NYSE: BWA)

BorgWarner is expected to benefit from the growing demand for its strong technology-based product portfolio. About $1.95 billion of new powertrain business is expected between 2008 and 2010. Also, BWA has healthy financials with low debt and has further taken initiatives to maintain margins in the challenging North American industry environment. However, due to high raw material costs and price concessions to automotive makers, we rate the shares a Hold.

On May 1, 2008, BorgWarner reported first quarter 2008 results. For the quarter, sales were up 17% to $1,498.9 million, compared with $1,277.8 million in first quarter 2007. Net income in the quarter was $88.7 million, or $0.75 per diluted share, compared with $58.4 million, or $0.50 per diluted share in first quarter 2007 adjusted for the two-for-one stock split on December 17, 2007.

deCODE genetics, Inc. (Nasdaq: DCGN)

deCODE genetics is a biopharmaceutical company that uses genetics to develop drugs, diagnostics, and pharmacogenetics for the healthcare industry. We were pleased to see the positive phase II data on candidate DG-031 and the phase IIa data on DG-051.

However, the company announced the voluntary suspension of the phase III trial for DG-031 due to manufacturing problems in early October 2006. We believe DCGN will trend sideways over the next few months as investors await a partnership announcement for DG-031, DG-041 and DG-051. We would also like to see the financial performance of the diagnostics tests launched recently.

Sohu.com (Nasdaq: SOHU)

Sohu.com, Inc. reported blockbuster financial results for the first quarter of 2008. The company's revenue and earnings greatly exceeded market expectations and company guidance because of strong growth in its online game business.

Although SOHU faces fierce competition from different fields, the company manages to be a main player in almost each field. With the Beijing 2008 Olympics sponsorship, SOHU has a well-known brand and rich website resources to leverage the great opportunities for online business in China.

On April 28, Sohu reported unaudited financial results for the first quarter ended March 31, 2008. For the first quarter, its total revenues were US$84.8 million, up 156% year-over-year and 30% quarter-over-quarter. Its brand advertising revenues were US$33.2 million, up 41% year-over-year and 3% quarter-over-quarter. Its online game revenues were US$41 million, up 24 times year-over-year and 71% quarter-over-quarter. Its net income was US$21.6 million or US$0.55 per fully diluted share. Its net income increased by 383% year-over-year and 43% quarter-over-quarter.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.