Accuray results

ARAY came out with its 4Q results last night.

According to this post on the Yahoo MB, this is the first follow up by the UBS analyst (Erik Schneider):

>>UBS maintained their sell rating and PT of $7.00 due to lack of confidence in 2009 earnings.

Non-contingent backlog shows initial sign of strength

Although one quarter does not make a trend, we note that this increase is positive since we view this section of backlog as a fairly reliable indicator of revenue to be recognized in the near-(Product only), medium- (Product and Service) and long-term (Service only).

The company received new orders for 28 systems and the non-contingent backlog increased by $75M to $460M. This is the largest increase in non-contingent backlog in at least two years. We view this as a positive initial indicator, but the drop-through to recognized revenue still appears to be lagging.

The contingent backlog represents orders with a higher probability of cancellation that we would think of as the end stage of the sales funnel. The company removed another $29M of orders from its contingent bucket due primarily to a decline in expected order realization for stand-alone centers that now comprise about half of the company’s remaining contingent order base.