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Tech Industry

Downgrade dings Proxicom shares

    E-business services provider Proxicom slid 2 11/16, or 6 percent, to 39 5/16 Wednesday after BB&T Capital Markets downgraded the stock from a "strong buy" recommendation to a long-term "buy."

    On Tuesday, Proxicom acquired Clarity IBD Ltd., one of Britain's leading e-business consultancies for around $73 million in cash and stock.

    Under terms of the deal, Proxicom will pay $16 million cash and 1.29 million shares for Clarity IBD, which the Proxicom said was the latest strategic initiative to boost its international operations.

    Proxicom, based in Reston, Virginia, has offices in Munich, Rome and Madrid as well as five other major U.S. cities.

    Clarity, formed in 1996 and employing 80 staff, is a recognized leader in implementation of e-commerce strategies in IT and telecommunications, retail, travel and financial services, Proxicom said in a statement.

    Last quarter, Proxicom hurdled analysts' estimates, earning $1.9 million, or 6 cents a share, on sales of $29.6 million.

    The $29.6 million in sales was a 130 percent improvement from the year-ago quarter when it lost $10,000 on sales of $12.9 million.

    First Call consensus expects it to earn 3 cents a share in its first quarter and 15 cents a share in the fiscal year.

    Its shares hit a 52-week high of 67 1/2 in January after falling to a low of 8 1/2 in May. The stock split 2-for-1 in February.

    All 14 analysts following the stock maintain either a "buy" or "strong buy" recommendation.

    Reuters contributed to this report.