Guidance takes toll on Echelon; Needham waiting for "profitable growth"

Echelon's (ELON -16.5%) light Q1 revenue guidance (revenue of $16M-$18M vs, a $19M consensus) easily overshadowed a Q4 beat and in-line Q1 EPS guidance (-$0.08 to -$0.13 vs. a -$0.10 consensus). With shares having soared in the weeks following the Google/Nest deal, investors were in a profit-taking mood.

Needham, one of three sell-side firms covering Echelon, has downgraded  the industrial automation system vendor to Hold. Though still optimistic about Echelon's long-term ability to profit from the "Industrial Internet of Things," it doesn't expect the trend to drive "more tangible revenues that can truly drive profitable growth" before 2015 at the earliest.

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