Parametric posts loss but stock jumps on outlook
By Siobhan Kennedy
NEW YORK (Reuters) - Business-to-business software maker Parametric Technology Corp. Tuesday posted a net loss for the latest quarter, but the stock jumped after the company said results in the coming fiscal year would meet estimates despite the slowing economy.
Shares of Parametric jumped more than 14 percent, or 84 cents, to $6.66 in early afternoon trading on the Nasdaq stock exchange.
Including charges, Parametric -- whose software enables people to share information and collaborate on engineering design projects over the Internet -- posted a net loss of $24.9 million, or 10 cents a share in its fiscal fourth quarter, compared with net income of $6.9 million, or 3 cents a share in the year-ago quarter.
Revenue fell to $225 million from $235 million in 2000.
Excluding extraordinary items such as a restructuring charge of $34.3 million for cutting up to 10 percent of its staff during the quarter, Needham, Massachusetts-based Parametric managed to post a pro forma profit of $7 million, or 3 cents a share, for the quarter ended Sept. 30 vs. $13.7 million, or 5 cents a share, in the prior year.
The pro forma results beat the lowered Wall Street consensus estimate of 1 cent a share, according to Thomson Financial/First call. The estimates ranged from a loss of 5 cents a share to a profit of 4 cents.
"It looks good," John Cregan, an analyst with brokerage firm SoundView Technologies said. "If companies can actually keep to the numbers that are out there in this environment then that's great."
"And what you found here with Parametric is that they actually came in at the high end of the consensus range in both revenues and earnings," Cregan added.
"Given the environment and given what some of their bigger competitors have done I thought their results were good," agreed Marty Sagrin, an analyst with Victory Capital, a fund that manages $75 billion in assets.
The fact that Parametric beat estimates gives confidence to investors that perhaps a bottom for Parametric is in sight, said Jessica Kourakos, an analyst with Goldman Sachs.
"Maybe the fact that they've made the numbers this time round is the first little indicator that that might be the case," Kourakos said.
FIRST QUARTER, 2002 TO MEET STREET
For the first quarter and full year 2002, Parametric said it expected to record earnings and revenues that were in line with Wall Street estimates.
"The estimates that we gave for 2002 are virtually flat," Ed Gillis, Parametric's chief financial operator told Reuters.
"The economy is hurting us ... but we are sure that as companies begin to increase their spending we will be well positioned for growth," Gillis added.
For the first quarter, ending Dec. 31 the company expects to earn 3 cents to 6 cents a share on revenues of $205 million to $220 million.
Analysts expected average earnings of 4 cents a share, with 11 estimates ranging from a loss of 3 cents to a profit of 6 cents, according to Thomson Financial/First First Call. The research firm did not tally outlooks or issue a consensus for revenues.
For fiscal 2002, ending next September, the company now expects to earn 28 cents to 38 cents a share before items on revenues of $900 million to $950 million. Analysts expected the company to earn an average of 27 cents a share, with 12 estimates ranging between 19 cents and 38 cents. Five analysts expected Parametric to generate an average of $925.8 million in revenues for the year.
Analysts said Parametric's upbeat outlook was partly a result of the company's successful transition to closing smaller deals, unlike its chief competitor MatrixOne Inc. (MONE.O), which warned last week it would miss its third quarter earnings partly due to its inability to close bigger deals.
"The guidance that they gave last quarter basically removed all the large, multimillion dollar deals," Victory Capital's Sagrin said.
For the last two quarters, Gillis said Parametric had not booked any deals over $3 million.
"That's in contrast to the previous 10 quarters," Gillis said. "For me that is the best proxy of what is going on with the economy."
Gillis said manufacturing companies which typically booked large multimillion dollar contracts had postponed spending decisions in the light of the slowing economy and the uncertainty surrounding the U.S attacks in Afghanistan.
"I think that people's natural instinct is to be conservative," he said. |
