Andrew Corporation's Stock Price Yo-Yo (ANDW)

Shares in Andrew Corporation (NASD:ANDW), which designs and manufactures equipment for the communications infrastructure markets, have zipped between $10 and $15 since the summer of 2004. You could get a sore neck watching the price move.

Andrew has a solid and broad array of products. The company makes base station antennas, Wi-Fi antennas, RF power amplifiers, transmission line systems, and filters. But, after rapid growth between the fiscal year that ended 9/30/03 and 9/30/04 when revenue rose from $1 billion to over $1.8 billion, things slowed down. Revenue for the fiscal year ending 9/30/05 were up only slightly to $1.96 billion. The quarter ending 12/31/05 had a top-line of $515 million and operating income of $21 million, both slight drops from the quarter immediately before. Guidance for the current quarter was not for strong growth.

One of the things that scares Wall Street about Andrew is that 68% of its revenue comes from 25 customers. Although the company does not say much about who these specific customers are, one would assume from their business that the large telcos, cell phone companies, and cable guys would be in that mix. And, the business in this industry can be choppy from time-to-time as Powerwave (NASD:PWAV) found out this week.

First Albany recently initiated Andrew as a Buy. I don't think so. The company has more to prove about consistent growth before it breaks north of $12 or $13.

ANDW Yo-Yo Since Summer 2004

Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He was also the president of Switchboard.com when it was the 10th most visited site on the internet, according to MediaMetrix. He has been chief executive of FutureSource, LLC and On2 Technologies, Inc., and has served on the board of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. McIntyre can be reached at [e-mail].