Monday January 8, 12:02 pm Eastern Time
RESEARCH ALERT-BEA Systems EPS view cut
NEW YORK (Reuters) - Wit Soundview analyst Kris Tuttle on Monday cut her fiscal 2002 earnings estimate for application software maker BEA Systems Inc. (NasdaqNM:BEAS - news) to 35 cents a share from 37 cents.
In a report, Tuttle said her rating on the stock remains strong buy, and her price target remains $90.
``Our confidence in their fundamentals is as strong as ever, but some exposure to spending shifts related to the 'dot-com ripple' suggests a more conservative stance on the early part of this calendar year,'' Tuttle said.
``Our customer composition analysis ... paints a reassuring picture, but discretion is the better part of valor.''
BEA shares were down $11-1/2 at $42-1/8.
Nachfolgend nimmt der CEO von BEAS Stellung zu den jetzigen Geschehnissen der Börse!
http://www.stock-channel.net/Board/smilies/wink.gif
MM
BEA chief shrugs off analyst revision
CEO Coleman gives reasons for market turnaround
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 6:14 PM ET Jan 8, 2001
Newswatch
Latest Headlines
Get Alerted
SAN JOSE, Calif. (CBS.MW) - Bill Coleman, chief executive of e-business software company BEA Systems, touted his company's sales backlog Monday, after he lost about $65 million on paper in light of negative analyst reports that sunk BEA shares by 13 percent.
But more importantly, the CEO of one of the world's most highly valued software companies said that he sees reason for a Nasdaq turnaround in February. He expects stronger-than-anticipated corporate earnings when tech market leaders including Cisco (CSCO: news, msgs) report quarterly results in the coming weeks.
Coleman seems to be among the few technology CEOs to say anything positive about the market following last week's post-rate-cut slide.
"The market is at the absolute high point in terms of pessimism," Coleman said. "People are just piling on the negativity now. With Cisco's coming announcement and all ... it's about to change."
Coleman says he expects positive earnings surprises in the coming weeks, " ... since we've seen all the negative ones." Cisco is scheduled to report earnings Feb. 6, while BEA (BEAS: news, msgs) will report Feb. 22.
Stock strategists seemed to echo at least part of Coleman's comments on Monday. To be sure, the market is negative, and investors don't want to buy ahead of fourth-quarter results, acknowledged David Powers, senior technology analyst at Edward Jones.
"Investors need a stronger outlook on earnings in order to feel comfortable pushing stocks substantially higher," Jones said. See full story.
Rebound predicted
Coleman said that companies in the personal computer industry probably will experience a poor start to the year. But he argued that hardware and software companies that are focused on the Internet - including his own -- will start to rebound.
Coleman's optimism came following analysts reports that helped take a hunk out of BEA's stock - and Coleman's portfolio - on Monday.
Analysts at Prudential Securities lowered their 12-month price target for BEA shares to $85 from $100, citing valuation concerns. One reason for the downgrade was that "BEA has the second-highest valuation in the software industry," according to the report. Based on a revenue multiple, BEA is the most expensive software stock behind security software maker Check Point (CHKP: news, msgs) .
Separately, Wit Soundview cut its earnings estimates on BEA, although the analyst firm kept its "strong buy" rating on the stock, and a $90 price target. The company cited the possibility of reduced spending by dot-com companies for the revision.
But Coleman argued that BEA's business is bounding, in light of economic worries that plague many software companies. The company will enter its fiscal-first quarter having nearly all of its software license revenue already booked, he said.
"We are not limited by demand," Coleman said. "The only thing we're limited by is how fast we can build the sales channel and hire people."
Coleman added that in light of a number of warnings from others in the software industry, BEA's earnings continue to beat Wall Street estimates. He said it helps that BEA's gross margin continues to increase.
BEA should continue to increase software license revenue one percent a quarter in fiscal 2002, he said. Software licenses made up about 57 percent of sales in the fiscal-third quarter, and they should represent about 60 percent in the fiscal-fourth period.
While software sales are on their way up, BEA's services sales are decreasing. But that's part of the plan. Instead of competing with system integrators, BEA is throwing more services work to other companies -- and it's reaping rewards through better sales of high-margin software, according to Coleman.
"We finally getting traction from the system integrators that are doing all this services work," Coleman said.
BEAs shares dropped $7,19 to $46.44 in Nasdaq trading Monday
vBulletin v3.0.3, Copyright ©2000-2012, Jelsoft Enterprises Ltd.