The market will push UEIC to sub $16 tomorrow.

--30% Q3 EPS miss ($0.28 actual vs $0.40 expected)
--3% Q3 revenue miss ($76.5m actual vs $79.0m expected)
--Q4 EPS guided down to $0.44 to $0.50 range ($0.66 expected)
--Q4 revenue guided down to $81m to $85m ($95m expected)
--Q4 revenue guidance seems overly optomistic considering the quarterly Y-o-Y revenue trend and the current recessionary environment. Y-o-Y revenue increase/(decrease) is as follows:
Q107--21.8%
Q207--36.5%
Q307--15.7%
Q407--(5.0%)
Q108--(7.3%)
Q208--(1.1%)
Q308--11%
Q408--22.4% to 28.4%
--The decline in gross profit is accelerating:
Q107--36.9%
Q207--34.5%
Q307--37.3%
Q407--37.2%
Q108--35.5%
Q208--34.3%
Q308--32.6%
--Tangible book value declined 5.8% in Q3 from Q2 ($10.40 in Q2 to $9.80 in Q3)

The only good news in the ER today was that the trend of Y-o-Y declining revenues was reversed in Q3. The CC should shed more light on how this was accomplished (organic growth or Q4 orders pushed into Q3). If management provides a prelim 2009 outlook during the CC, this could drop even faster tomorrow. Sorry, but current expectations for 2009 EPS to grow 50% over 2008 is unrealistic considering the 3 quarters of performance this year. IF management can grow EPS 15% next year, then 2009 EPS guidance would be approx $1.30. Assuming UEIC continues to trade in a 2009 PE range of around 11 and a PEG of just below 1, current earnings and the Q4 outlook would indicate UEIC will trade in the $14 to $15 range under current market conditions.

I am short UEIC.