Intuit Drops Despite Upping Guidance
By Ronna Abramson
Staff Reporter
11/14/2002 01:07 PM EST
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Shares of Intuit (INTU:Nasdaq - news - commentary - research - analysis) plunged Thursday, a day after the tax and small-business software maker lowered its revenue outlook for recent acquisitions but beat estimates and raised guidance. Investors also may have decided to take some profits following the stock's recent run-up.
Analysts credited Intuit with reporting a solid first quarter Wednesday, with the company beating estimates and raising guidance for the full year. The company reported a 32% year-over-year increase in first-quarter revenue and beat earnings estimates by 2 pennies.
"The only negative thing that anyone could point to was the growth expectations for some of the acquisitions are a little slower," said ThinkEquity analyst Glenn Greene, who has an equal weight rating on Intuit. (His firm hasn't done any banking with Intuit.)
On a conference call Wednesday, Intuit lowered its revenue growth projections for its business verticals segment -- which produces software targeting specific vertical industries such as construction -- to 10% to 30% in fiscal year 2003. That's down from previous growth estimates of 30% to 50% for the segment, which was built through a handful of acquisitions in the past year.
The products in the business verticals segment are significantly more expensive -- selling for as high as $100,000 for a license fee -- than other Intuit products and consequently have been hurt more by the downturn in IT spending, much like large enterprise software vendors, analysts said.
However, in a note Thursday, Jefferies analyst Craig Peckham called the new growth estimate "still respectable" and noted that revenue from the vertical segment accounts for only 6% of full-year sales. Peckham has a buy rating on Intuit and his firm hasn't done banking with Intuit. |
