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Razorfish (RAZF – 5-1/8) is an e-consulting firm that boasts such high-profile clients as Charles Schwab and Time Warner. Along with many of its peers in the Internet sector, RAZF has been steeped in a downtrend of late, retracing 84 percent between its February peak and yesterday's close at 8-3/4. This morning, the stock has plunged 40 percent to a new all-time low.
Last night, the firm announced that its earnings per share for the third quarter will likely fall in the one-to-four-cent range. Analysts had expected the company to earn eight cents per share. Total revenue for the time period will weigh in around $77 to $78 million, said RAZF. Wall Street anticipated that the company would earn $80.5 million.
This morning, RAZF was greeted with a brokerage downgrade, as Lehman Brothers Holdings cut its rating on the shares from a "buy" to an "outperform." Heading into today, RAZF was covered by 13 brokerage firms, all of whom named the stock a "buy" or "strong buy." This leaves ample potential for further downgrades today, which could have even further negative repercussions for the shares.