I admire Mr. Kight for his forthrightness in re-stating estimates for the coming year.
Out of all that was said in today's release, the following quotes stand out:
Kight said the Company's new fiscal 1999 plans call for revenues of $245 to $250 million and earnings per share of 12 to 16 cents, compared with previous expectations of $265 to $270 million in revenues and earnings per share of 32 cents. He also said the Company expects a loss of 4 to 6 cents per share in the first quarter. . . .
We will continue to fund projects that expand our core financial electronic commerce offerings, drive intuitive ease of use, guarantee service quality at a dial-tone level, and enhance the seamless end-to-end customer care we offer to banks, billers, and their customers," he added. . . .
CheckFree also announced that CFO James S. Douglass, 33, now serves in the newly-established role of executive vice president, mergers & acquisitions. Douglass will focus on identifying and executing mergers and acquisitions that strengthen CheckFree's leadership in financial electronic commerce by extending or broadening existing services.
1) Revenues will be $245 to 255 million. Forget what was forecast. Numbers at this point are relative. If the earlier projection had been for $200 M in '99 and then been upped, would $245 to 255 M be a disappointment?
2) Funds will go towards expansion. What better use of revenues? I suppose the question to ask is if mergers and acquisitions will be accretive.
3) A new executive position has been created solely for the purpose of expansion. I'd say they're serious.
I've been in CheckFree for nearly a year and not once have I thought it was a short-term investment. Today we've been handed a blueprint and we have a choice of applauding the sturdy foundation or bemoaning the fact the clerestory windows won't be in for another year.
I'm setting my alarm for 4:50 PDT. Don't want to miss the conference call.
Pat |
