DRCO: Positive Preannouncement from Dynamics Research

By William Trent, CFA of Stock Market Beat

Small-cap watch list member Dynamics Research (DRCO) pre-announced earnings for the fourth quarter that were within the company’s guidance range but above the consensus estimate. According to the News Release:

The company reported preliminary revenue for the fourth quarter of 2006 of approximately $60 million, consistent with previously issued guidance of $59 to $62 million. For the year ended December 31, 2006 preliminary revenue was approximately $259 million. Earnings per diluted share are expected to be in the high end of the range of previously issued guidance of $0.13 to $0.16 per diluted share for the fourth quarter and $0.40 to $0.43 for the full year 2006.

The consensus was expecting $0.13 in earnings per share on $59 million in revenue.

The author may hold a position in the securities discussed. The author’s current holdings are as follows: Long: Union Pacific (UNP) put options; Air Products (APD) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Three Five Systems (TFS); IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Starbucks (SBUX) call options; Landstar (LSTR) put options; Plantronics (PLT) put options;

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