News Alert from Dow Jones Online News via Quote.com
Topic: (NASDAQ:ALYD) Alydaar Software Corp. , (NASDAQ:CPWR) Compuware Corp,
Quote.com News Item #5137615
Headline: Talk Of Compuware Alliance, General Optimism Boosts Alydaar Shares
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NEW YORK -(Dow Jones)- Alydaar Software Corp. shares were higher
Wednesday, with an analyst who follows the company saying the advance
was in response to optimism over an alliance with Compuware Corp.,
potential European contracts, and a bearish earnings and revenue
outlook.
Otto Grote, who follows the company for Derby Securities, said
Compuware (CPWR) delivered Tuesday a bullish outlook regarding its
partnership with Alydaar, which is working to develop a fix for the
so-called Year 2000 problem that could cause computers to go haywire
after 1999.
In addition, Grote said certain clients of European remediation
companies lacking in capacity are now transferring their business to
Alydaar.
The Charlotte-based company also confirmed that it expects to earn $2
a share on $75 million in revenue for 1998, Grote said. The outlook
"gives an idea on which direction the momentum is going," said Grote,
who has a "buy" recommendation on the shares.
The company posted a loss of $5.1 million in 1996 on $37,500 in
revenue.
In afternoon trading Wednesday, Alydaar's Nasdaq-listed shares (ALYD)
were up $1.375, or 8.3%, at $17.875 on volume of 187,400 shares,
surpassing average daily turnover of 155,100. The company's shares
started listing on Nasdaq on Dec. 4 after trading on the
over-the-counter bulletin board.
Cynicism set in over the past two quarters when investors expressed
disappointment that revenue wasn't coming in as quickly as anticipated
for Year 2000 firms. A major company in the sector, Viasoft Inc. (VIAS), fueled those fears when its chairman and chief executive told a November technology conference that he didn't expect sales to take off until second quarter 1998. He acknowledged that companies have been slow to respond to the Year 2000 problem, largely because of budget constraints.
Analysts, meanwhile, say the market is also concerned about what
those companies will do "post-year 2000. Damian Rinaldi of First Albany Corp. last month questioned: "Are (Year 2000 companies) a one-trick pony or do they have more in their bag of tricks to offer?"
But Alydaar Chief Executive Robert Gruder recently said the company
already has begun to post revenue. It posted $2 million in the third
quarter and anticipates $6 million to $8 million for the fourth quarter and $10 million to $18 million in first quarter 1998.
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