(UPDATE) Software-Tools Maker Macromedia Again Offers No Hint Of Rebound
Dow Jones Online News, Thursday, July 31, 1997 at 16:36
NEW YORK -(Dow Jones)- Investors Thursday turned pessimistic on
Macromedia Inc. after the developer of software-development tools late
Wednesday posted a fiscal first-quarter loss that was slightly wider
than expected on a 23% drop in revenue.
The San Francisco-based company has seen its fortunes fall because of
a troubled transition to new products and uncertainty about Apple
Computer Inc.'s future. Macromedia's software is popular among graphic
artists who use Apple's Macintosh computers. Macromedia has been pushing
increase sales of software used on Windows-based computers, but hasn't
seen a payoff yet.
At the close, shares of Macromedia (MACR) were down $2 or 17%, at
$9.563. Nasdaq volume of 3.6 million shares easily topped the daily
average of 538,658.
The firm reported a loss of $1.2 million, or three cents a share, in
the first fiscal quarter ended June 30, compared with net income of $7.1
million, or 18 cents a share, a year earlier. Analysts had expected a
loss of two cents a share, according to First Call. The company reported
revenue of $27.3 million. Macromedia's stock rose Wednesday amid
speculation that the company might report a slight profit.
Macromedia was hurt earlier this year by the decision to postpone the
rollout of the newest version of Director, its core product. The past
year has been a brutal one for Macromedia, which has been struggling to
move its product line out of CD-ROMs and into developing multimedia
tools that can be used on the Internet.
Macromedia makes software tools used to create multimedia special
effects on World Wide Web pages and other formats. The firm is a
stalwart in animation and Internet-design software and some analysts
have said the company's long-term prospects remain healthy.
Macromedia products are coveted by graphic artists. The main problem,
some folks say, is that more than half of all computer-graphics
professionals still use the Macintosh. And many of them have delayed
buying new software tools - including Macromedia's - because of
uncertainty about Apple's future.
Some experts have said bottom fishers should consider investing in
Macromedia because it might be poised for a big rebound. Adding even
more intrigue to the stock are recurring rumors that Macromedia could
soon find itself put into play.
Macromedia's low stock price makes it an attractive takeover target
in an industry consolidating. Speculation has been rampant in recent
months that Mountain View, Calif.-based Adobe Systems has considered
buying Macromedia. Microsoft Corp.'s name has also been bandied about as
possibly being interested in Macromedia. But most analysts will remain
skeptical until Macromedia persuades them that it has a compelling plan
to right the ship.
Another thing to consider: privately held firms Asymetrix and Aimtech
reportedly plan to combine this summer to better compete with
Macromedia. Aimtech competes against Macromedia in high-end multimedia
authoring tools. Asymetrix, meanwhile, competes with Macromedia in the
low-end authoring tools market.
Copyright (c) 1997 Dow Jones & Company, Inc.
All Rights Reserved.
Companies or Securities discussed in this article:
Symbol
Name
NASDAQ:MACR
Macromedia Inc
c Copyright 1997 Quote.com, Inc. All Rights Reserved. |
