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Non-Tech : EARNINGS REPORTING - surprises, misses & more
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To: 2MAR$ who wrote (230)8/6/2000 2:28:08 AM
From: 2MAR$  Read Replies (1) of 762
 
7/28... KANA Do Wrong?

ON24's Marc Lichtenfeld reported on Wednesday that Kana Communications (Nasdaq:KANA - news) had made its earnings available to some Wall Street analysts before the bell that day, even though the public didn't see the numbers until after the close. The stock was down 20% on the day, with twice the normal trading volume. It was down nearly another 12% Thursday on very heavy volume, for a total loss of over 30% in less than two trading sessions. The shares closed off at 38 3/4 on Thursday.

The quarter, though, was a good one for Kana. The enterprise-relationship management company saw record quarterly revenues of $28.7 million, a 301% increase year-over-year. Growth was strong in both licensing and service revenue, signaling that it has a broad foundation for its business.

It still lost money, more than $20.3 million, meaning it has a long way to go to profitability as it is still spending almost $1.70 for every dollar it brings in. Particularly troubling to me was the fact that service revenues were outpaced by service expenses. This should be a time-and-materials billing business that produces a healthy margin, even as it grows - management needs to address this immediately.

Investors anxious to see growth may be satisfied and, once the downdraft is over (look for a price south of $35 as an entry point), it will likely rally in coming months back to recent levels - the high 40s.
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