Software stocks mixed amid renewed concerns
(rewrites first paragraph, updates throughout)
PALO ALTO, Calif., June 12 (Reuters) - Software stocks as a
group erased their losses to finish slightly higher on Tuesday
amid renewed worries that the economic slowdown hampering
corporate technology sales in the United States is not lifting
and appears to be crossing the Atlantic Ocean.
Standard & Poor's computer software index <.SPCMSF> ended
just 0.05 percent higher at 885.67, off its day low of 859.85,
weighed down by declines in sector favorites such as Microsoft
Corp. <MSFT.O>, Oracle Corp. <ORCL.O>, Veritas Software Corp.
<VRTS.O> and Adobe Systems Inc. <ADBE.O>
Goldman, Sachs & Co. software analyst Rick Sherlund put
pressure on the sector with a report from a meeting of software
company chief executives and venture capitalists in Carmel,
California.
"As we near the end of the June quarter, companies are
collecting more reliable data on deal closure rates. Feedback
is very consistent -- there is growing concern that business in
the U.S. is at least as bad as in the first quarter and there
is increasing confirmation that Europe is slowing," Sherlund
wrote in a client note.
The big deals that many software companies count on to hit
profit forecasts remain vulnerable. Because many of those deals
close in the last few weeks of a software company's quarter,
reliable data is still forthcoming, Sherlund said.
"We have generally modeled sequentially flat to down
results for most of the software vendors we follow, but we
would, frankly, be relieved to see companies meet these
estimates given the tone and consistency of the feedback we are
gathering," wrote Sherlund, who added that software vendors and
Wall Street analysts may need to lower forecasts for the second
half of 2001 and, perhaps, for 2002 as well.
The Street will get additional insight into market
conditions when publishing software maker Adobe Systems reports
its results on Thursday. Oracle, the world's second-largest
software vendor, is set to report on Monday.
According to Thomson Financial/First Call, which tracks
analysts' forecasts, Adobe's earnings are expected to come in
better than last year's. Oracle, on the other hand, is forecast
to post earnings that are lower than the year-ago quarter, when
sales surged as a result of the since-busted dot-com boom.
Among the stocks posting gains on Tuesday were sales and
customer software giant Siebel Systems Inc. <SEBL.O> and
Peregrine Systems Inc. <PRGN.O>, which earlier this week
announced its plan to buy Remedy Corp. <RMDY.O> in a $1.08
million cash and stock deal.
((Palo Alto bureau 1 650-461-3401 or
lisa.baertlein@reuters.com))
REUTERS
*** end of story ***
(REUTERS) UPDATE 1-Software stocks mixed amid renewed concerns
UPDATE 1-Software stocks mixed amid renewed concerns |
