Re: Dycom Industries
Thread,
Well this Bloomberg article explains the freefall in Dycom's stock price today. I'm surprised that a research report, by an individual, who won't release it to reporters or Dycom, can wreck such havoc on market value. I believe this Bloomberg report has pretty much put the issue on the table.
I noticed Banc of America also reiterated it's strong buy rating today. So they must have talked to DY also. If DY can bounce back, at least they got some major press today the likes of which they haven't seen before<G>.
I believe DY reports 4th quarter and year end results on Monday or Tuesday. You can get a good idea of infrastructure spending by listening to them. I find it pretty informative as a last mile investor.
MikeM(From Florida)
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Dycom Drops on Report That Chairman Says Isn't True
Palm Beach Gardens, Florida, Aug. 26 (Bloomberg) -- Shares of Dycom Industries Inc. which lays cable for telephone and cable- television providers, fell 14 percent on a report of accounting irregularities that the company says is incorrect.
Dycom fell 6 3/16 to 37 1/2 in trading of 3.6 million shares, almost 20 times its three-month daily average. Earlier, they touched 33.
The Center for Financial Resource and Analysis Inc., a Rockville, Maryland-based independent-research company headed by accounting professor Howard Schilit, published a report on Dycom in its newsletter, a spokeswoman said. She declined to provide a copy of the report, and said Schilit wouldn't talk to reporters.
The newsletter misinterpreted Dycom's third-quarter filing with the Securities and Exchange Commission and ''made some assumptions that aren't correct,'' Chairman Thomas Pledger said in an interview. He said the newsletter content was read to him and he hadn't seen it himself.
The report suggested Dycom may have artificially boosted revenue and earnings by being more aggressive in recognizing revenue than previously, according to analysts who'd seen the newsletter. ''We can defend anything he (Schilit) says,'' Dycom General Counsel Mark Tiller said. Schilit didn't contact the company before releasing the report, and wouldn't take calls from Dycom executives today, Tiller added. ''I disagree with several of the conclusions they reached and, in general, believe the market overreacted,'' said Christopher Gutek, a Morgan Stanley Dean Witter analyst who has an ''outperform'' rating on Dycom's stock.
Recent Results
Dycom's consolidated financial statements for the three years ending July 31, 1998, conform ''with generally accepted accounting principles,'' outside auditors Deloitte & Touche LLP wrote in a letter dated Aug. 31, 1998, and included in Dycom's prospectus for the sale of 2.7 million shares in May. Its financial report for the year ended July 31 hasn't been released. ''I am not aware of any instances where their accounting practices have been called into question,'' said Morgan Keegan & Co. analyst Ramkrishna Kasargod, who also has an ''outperform'' rating on the stock.
Dycom, based in Palm Beach Gardens, Florida, also provides engineering and maintenance services for aerial and underground fiber-optic, coaxial and copper cable systems owned by telephone companies and cable-TV operators. |
