This is from Stree.com 4/5
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Softness in Software Darkens a
Bright Day in Tech
By David Shabelman
Staff Reporter 4/5/99 5:16 PM ET
SAN FRANCISCO -- While the Nasdaq was setting
a new record and Internet stocks and chipmakers
were on a rampage, a number of software
companies were hit hard.
Software companies have suffered through a string
of earnings warnings, signaling a major shift in
corporate spending. Though most analysts say the
money is being funneled toward fixing year 2000
bugs, others say the problem runs deeper.
Software developer
Aspect
Development
(ASDV:Nasdaq),
software designer
Aspen Technology
(AZPN:Nasdaq) and
Axent Technologies
(AXNT:Nasdaq) all
warned of earnings shortfalls. These reports followed
recent earnings warnings from Documentum (DCTM:Nasdaq) and
PeopleSoft(PSFT:Nasdaq).
"When you start to see companies like Axent and
Documentum, which have executed flawlessly in the
past and have good management teams,
preannounce, it's probably Y2K-related," says David
Hilal, analyst at Friedman Billings Ramsey,
adding that software companies may continue to
have a hard time for the rest of the year.
But some analysts say the problem with many of
the software companies is even bigger than Y2K.
"It's also the products," says George Gilbert, an
analyst at Credit Suisse First Boston who believes
many enterprise software companies are undergoing
transitions. "The Web has grown faster than
expected."
Gilbert says software companies are scrambling to
move to Web-enabled and front-office applications
that deal with customers. "They've shifted all their
resources to deal with the Web and customers, but
they haven't proven [the products] to customers," he says.
Aspect Development closed down 14 15/32, or 65%,
at 7 15/16. Aspen Technology closed down 3 5/16,
or 25%, at 9 15/16, and Axent Technologies closed
down 11 15/16, or 60%, at 8 1/16. >> |
