Morgan Keegan Reflects On R&D Tax Credit

Morgan Keegan has published a research report on Communications Equipment companies reflecting on the R&D tax credit and has not made any ratings or estimate adjustments to companies that do not pay U.S. taxes.

In the report, Morgan Keegan writes "We have reviewed our coverage universe and have adjusted estimates for taxpaying companies as a result of the R&D tax credit. Many of our companies under coverage will report higher than expected earnings for 4Q10 and experience upward revisions of 2011 estimates. Although the incremental earnings do not affect business fundamentals, we envision potential for a positive stock tailwind should companies report earnings ahead of consensus or prior guidance. We imagine some stocks might benefit from program trades and positive screenings in quant funds, but we anticipate most will look through the one-time nature of the earnings upside."

ADTRAN (NASDAQ: ADTN) $35.39 Outperform
Alcatel-Lucent (NYSE: ALU) $3.00 Outperform
Arris Group (NASDAQ: ARRS) $10.88 Outperform
Cisco Systems (NASDAQ: CSCO) $19.55 Outperform
Dycom Industries (NYSE: DY) $13.88 Outperform
Acme Packet (NASDAQ: APKT) $57.98 Market Perform
BigBand Networks (NASDAQ: BBND) $2.70 Market Perform
Ciena Corporation (NASDAQ: CIEN) $21.42 Market Perform
Harmonic (NASDAQ: HLIT) $8.26 Market Perform
Juniper Networks (NYSE: JNPR) $36.49 Market Perform
Symmetricom (NASDAQ: SYMM) $7.06 Market Perform
Tellabs (NASDAQ: TLAB) $6.72 Market Perform