MDSI Tumbles, WaveRider Rumbles (from Stockhouse.com)
Toronto, ONT, July 7 /SHfn/ -- Wireless stocks were a mixed bag on Thursday, with particular events rather than broader market conditions driving individual issues.
MDSI Mobile Data Solutions [MDSI] / [T.MMD] was the latest in a string of companies to tumble on second-quarter earnings warnings this week. Shares of the wireless
dispatch software company plunged as much as 52% at one point, to US$11.62. The stock recovered slightly to close at $14.44 on heavier than usual volume of 1,924,100
shares.
The mobile dispatch software company said that its results for the period ended June 30 would show a loss of between four and seven cents a share. First Call estimates
projected a profit of three cents a share.
It is never a good time for a profit warning, but this week seemed a particularly precarious time for bad news. Investors have been quick and harsh when meting out
punishment for missed estimates, as evidenced by the plunging valuations of Entrust [ENTU] and Computer Associates [CA] on Wednesday.
Analysts expected earnings to be squeezed this quarter, due to a recent acquisition. In a recent StockHouse article, the earnings dilution
related to the purchase was noted. MDSI blamed the surprise Q2 loss on delays in purchasing decisions by potential customers in the
telecom sector, which was not predicted by analysts.
CEO Ken Miller said that he expects the company to return to profitability on a consolidated basis in the third quarter. Looking deeper into
the numbers, he said, shows that the company is in fact profitable on its enterprise side alone, but costs related to MDSI's new e-business
initiative pushed earnings into negative territory.
Investors should look for good news out of the company toward the end of this month, when MDSI launches its Internet-based application
services.
TV appearance boosts WaveRider shares
Shares of WaveRider [WAVC] performed solidly on Thursday, as CEO Bruce Sinclair stepped into the limelight on a leading US business television show. Stock in the
wireless Internet products developer jumped $1 to US$9.28 on heavy volume of 5,244,300 shares spurred by Sinclair's appearance.
The CEO described the company's Last Mile Solution product line that will allow ISPs and telecom carriers to bring affordable, high-speed Internet access to residential and
SOHO customers.
He also highlighted WaveRider's entry into the Asian market. Its router targeted at companies requiring Internet access was recently installed with ISPs in China, and
WaveRider is now offering the product to several ISPs in Japan.
Brokerage firm Groome Capital forecasts fiscal 2000 revenue of US$20.4 million, a leap from the US$1.75 million revenue total in 1999. During the show, Sinclair noted that
the product order rate will exceed that top line estimate.
The company recently moved to NASDAQ from the OTC bulletin board, and is now reaping the benefits of the increased attention that comes with a senior exchange
listing.
Buoyed by today's market action, the WaveRider annual general meeting scheduled for Friday, July 7 should be upbeat. One topic of discussion at the meeting will be the
company's increased focus on building a media and market presence. |
