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<<Shares in two related Atlanta-based software companies fell sharply Thursday after both companies said fiscal fourth-quarter revenues would fall below year-earlier figures....
Analysts said, however, that American Software announced that its licensing fees and revenues would be down chiefly because of a sales slowdown associated with Year 2000 computer issues.
Richard Williams, an analyst with Jeffries & Co., said Feb. 29, not Jan. 1, marked the end of the so-called "lock down" period for complex types of software. Because 2000 is a leap year, many companies waited until that date was passed to assess their future software needs. Williams said American Software typically has a six- to nine-month sales cycle.
"There just hasn't been enough time for them to translate customer interest into revenues," Williams said. "The pipelines have improved tremendously. Companies want very much to get the software, but it takes more time."
Sheldon Grodsky, an analyst with Grodsky Associates Inc., said there is still demand for American Software products, despite the fact that the company said it will report a net loss for the fourth quarter.
"The question is whether business is being deferred, or whether it's disappearing and the general feeling is that it has been deferred," Grodsky said....
[Williams] said the company is working to hire more sales people and develop existing partnerships and create new ones to increase sales. For example, he said Logility got a number of leads from International Business Machines Corp. (IBM) about two months ago.
"That alone should represent a very significant uptick in revenues for both companies," Williams said....
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