Commerce One Down -2: Analysts Cite Drop In Cash >CMRC
By Kaja Whitehouse
of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Reacting to a drop in cash at Commerce One Inc.
(CMRC), investors dropped the company's stock 17% Friday.
Commerce One's business is "substantially worse" than expected, said analyst
Douglas R. Augenthaler of CIBC World Markets Corp. in a research note
Friday. Most notable was the "extraordinary cash drain" in the first quarter
of $92 million, to $249.4 million from $341.4 million in the fourth quarter,
he said.
Augenthaler cut his rating on the Internet software vendor to hold from buy.
UBS Warburg also cut the stock to hold from buy, while SG Cowen reduced its
rating to buy from strong buy.
"The balance sheet deteriorated somewhat more than anticipated," said Andrew
Roskill, analyst at UBS. "Most important" was the cash drop, he said.
Analysts said they are concerned about the company's more-than 50% slump in
deferred revenue, which indicates how much future business has been booked.
For the first quarter, Commerce One said its deferred revenue fell to $51.6
million from $112.3 million. Future bookings fell on "prepaid royalties"
from Commerce One's marketing partner SAP AG (SAP), said Roskill.
The overall decline in revenue and operating earnings didn't appear to
concern analysts, however. It was expected the company would meet already
reduced first-quarter revenue forecasts of $170 million, with an operating
loss of 11 cents a share.
Late Thursday, Commerce One reported that it lost $1.02 a share in the first
quarter, compared with a loss of 29 cents a share a year earlier. Excluding
items, the loss was 11 cents a share. Revenue rose to $170 million from $35
million.
Some said future revenue forecasts were lowered more severely than expected,
however. Commerce One lowered revenue forecasts for 2001 to between $675
million and $700 million, down from previous estimates of $900 million to
$925 million. Revenue in 2000 was $401.8 million.
Shares of Commerce One were recently down 19%, or $2.60, to $11.11, on
Nasdaq volume of 8.9 million shares, compared with daily average volume of 9
million shares.
-By Kaja Whitehouse, Dow Jones Newswires; 201-938-5393;
kaja.whitehouse.dowjones.com
(END) DOW JONES NEWS 04-20-01
11:35 AM
*** end of story *** |
