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Cramer Calls Daktronics CEO on Lowered Guidance

Tuesday, 27 Feb 2007 | 7:38 PM ET

Clear Channel Outdoors may be benefiting from the burgeoning billboard business, but Daktronics doesn’t seem to be having the same success. Despite hitting revenue targets last quarter, the company offered lower guidance for Q4. This has Cramer questioning his love for the stock – at least in the short term. He put a call into President and CEO James Morgan to see if it was worth holding on to.

What’s the disconnect between outdoor billboards, which seems to be a business on fire, and Daktronics ability to deliver? Morgan says regulatory constraints on how fast these billboards can be deployed is preventing the company from taking full advantage of the demand in the market – hence, the lowered guidance.

With sports being half the business, as well as footprints in on-premise advertising and transportation, “We believe the underlying factors and drivers of our business are still intact,” says Morgan.

Even still, Cramer is on the fence with this stock. He recommends investors wait to see what happens. He pushed the “Don’t Buy” button on this one.

Questions? Comments? madmoney@cnbc.com

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