| Verity (VRTY) 21.78 +2.33: Pretty quiet after hours session, but this stock is selling off on high volume. This provider of business portal infrastructure software is selling off in the after hours session as the company warned for AugQ as it now sees EPS at $0.11-0.14 vs. consensus of $0.23. This came as such a surprise because on June 7 the company reaffirmed guidance for MayQ saying it expected to meet numbers. While mgmt was silent on AugQ, that they reaffirmed MayQ soothed investors about the near term. Based on the company's description, you would think they were in trouble. However, Verity is currently profitable as mgmt now expects to earn $0.85-$1.00 for the current fiscal year. Also, VRTY is not solely tied to B2B as it sees sales from blue chip companies including AT&T Wireless, Baxter, JP Morgan Chase, Deloitte-Touche, Schering-Plough etc. However, despite the solid customers, there are concerns. Large revenue shortfalls by Autonomy and Convera, suggest that the environment continues to be difficult for search software companies. Just like its larger enterprise software brethren, spending for this category is still vulnerable to cutbacks. Despite the sell off, we see little to get excited about here as the trend for software spending is decidedly heading south or east at best. Briefing.com remains cautious on enterprise software companies generally especially during warning season. -- Robert J. Reid, Briefing.com |
