The article was in the FP which doesn't save their stories. Maybe this will help.
TORONTO (Dow Jones)--Geac Computer Corp.'s (T.GAC) stock continues to come
under selling pressure, reflecting concerns about the software company's
earnings outlook for the fiscal year ending April 30, 1999.
One analyst, who asked not to be identified, said he lowered his earnings
estimate for the 1999 fiscal year to C$2.46 a diluted share from a previous
estimate of C$2.69. Before the company announcement on July 7 of its results
for fiscal 1998, this analyst had estimated Geac would earn C$2.96 a diluted
share for fiscal 1999.
The analyst said the latest downward revision is based on Geac's guidance of
flat operating earnings and the company's historical tax rate of about 15%.
In fiscal 1998, Geac earned C$2.67 a diluted share, helped by a favorable
tax rate of 6%. However, if the company's historical tax rate was applied,
Geac would have earned roughly C$2.45 a diluted share in fiscal 1998, said
David Scott, the company's chief financial officer.
On the Toronto Stock Exchange, Geac's shares are down 0.90 to 37.95 Friday,
on volume of about 320,000 shares. The stock was trading at C$50 just before
the company made its fiscal 1998 earnings announcement last week.
The company has taken a conservative approach to its growth outlook for
operating earnings for fiscal 1999 to account for an increase in research and
development spending and moves to build up the company's sales structure,
costs which could cause short-term pressure on the company's profit margins,
explained Faye Hou, manager of investor relations at Geac.
Still, Geac wouldn't have made these investments in R&D and its sales
structure if it didn't think they will, over the longer term, boost the
company's bottom line, Hou added.
Though Geac has guided analysts to expect flat operating earnings for fiscal
1999, that doesn't mean revenue won't grow over the same period. The industry
growth rate for enterprise software is estimated to be about 30% annually, and
this estimate can be used as an indicator for about half of Geac's annual
revenue, Hou said. |
