NEON I'm way behind today, so if this has been posted already....sorry.
NEW YORK, Nov 21 (Reuters) - Executives at New Era of
Networks Inc. <NEON.O>, said on Tuesday that they remain
comfortable with their outlook for the company, after New Era's
shares fell more than 50 percent on revenue concerns.
The company's shares fell on the Nasdaq stock market
$10-1/2, or 52.8 percent, to $9-3/8 on concerns about the
company's third quarter revenues after the recent filing of its
quarterly financial statement with the Securities and Exchange
Commission.
Analysts said the filing raised concerns in the market that
New Era of Networks had sold software to companies in exchange
for equity sales and had booked the sales as non-cash revenues.
The "transactions effectively include nonmonetary sales of
our software and services for equity securities of the
investees and for software and services of other vendors," New
Era of Network's filing said.
The company's chief executive, Rick Adam, however, said
that cash had changed hands in these transactions, and it would
be incorrect to refer to them as merely non-cash transactions.
He said that the company was merely following generally
accepted accounting standards in the way it booked the
transactions.
"Generally we think these are very common practices at
technology companies," he told Reuters in an interview.
In a conference call with investors, he said he remained
comfortable with the company's outlook for the fourth quarter
and for 2001 and predicted continued strong revenue streams.
The company expects to post fourth quarter revenue of $59
million, up from $55.2 million in the third quarter.
Analysts have become concerned that third quarter revenues
were boosted by up to $10 million in non-cash revenues after
the company took strategic stakes in companies that it sold
software to. Without the deals, the company may have missed its
revenues targets, they said.
But executives said the company would have been able to
gain the additional revenues if it hadn't taken stakes in the
companies.
"It would have been dead wrong to assume that these
revenues would have gone away," the company's chief financial
officer, Steve Webb, told the conference call.
Executives also said they expected to see strong revenue
growth from software sales in the coming quarters and that New
Era of Network's investment in small technology companies will
pay off.
"Our sense in investing in these companies is that they
will show a profit," Adam said.
((--New York Equities Desk, 212 859 1700))
((--New York Equities Desk, 212 859 1700))
REUTERS
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