Pete just made a statement at approx 7:31 EDT....
"The whole industry has slowed because of the move from the P.C. to being Internet Based...Still, CKFR electronic investment services grew 30% topline and 50% bottom line... Software grew 20% topline and 30% bottom line... " The CKFR rocket is being refueled (ironic in that I live 20 miles from Cape Canaveral, and we just lost one...
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Wednesday August 12, 7:41 pm Eastern Time
INTERVIEW - CheckFree sees industry issues
NEW YORK, Aug 12 (Reuters) - CheckFree Holdings Corp.'s chief executive said on Wednesday other software and technology service firms could see a slowdown in electronic commerce business as banks consolidate and upgrade technology systems.
CheckFree, an electronic bill payment company, is itself experiencing a letup in its business as its bank clients scale back efforts to lure new electronic banking customers while they merge and switch to new Internet-based platforms.
''I think there is definitely going to be an impact around bank consolidation and the technology change to the Internet in general,'' CheckFree Chief Executive Pete Kight told Reuters in an interview. ''There are definitely going to be slowdowns.''
CheckFree, which does back-end electronic banking processing, lowered its fiscal 1999 forecasts for new subscriber growth, revenues and earnings on Tuesday night, and saw its stock plummet 10-1/4 to 13-1/2 on Wednesday.
Its results are being hampered as U.S. banks focus less on marketing electronic banking services and more on integrating merger deals, switching from personal computer-based platforms to the Internet and preparing computer systems for year 2000.
''The shortfall came from a slowdown in banks marketing electronic commerce to their customers,'' Kight said. ''A fair number of our top 10 bank clients are involved in significant merger consolidations, which slowed up marketing efforts.''
Banks are also upgrading computer systems at a more rapid pace than anticipated, and at the same time, Kight said.
As a result, CheckFree said it expects to report a first quarter loss of $0.04 to $0.06 a share in the first quarter ended September 1998 compared with Wall Street forecasts for a profit of $0.03 a share.
It now plans for revenues of $245-$250 million in fiscal 1999 and earnings of $0.12 to $0.16 a share compared with prior forecasts of $265-$270 million and earnings of $0.32 a share.
But while Kight declined to predict CheckFree's revenues and earnings in 2000 or precisely when results would turn around, he said the wave of consolidation and computer upgrades in the banking industry would ultimately benefit the company.
''The issues that caused this slowdown are the exact things that prove this is a growing market,'' Kight said. ''They can use the new, larger bank to more aggressively move customers to the Internet. It is clearly a positive...''
Banks with Internet platforms were enrolling new electronic commerce customers at a faster pace than banks with personal computer platforms, he said.
Kight also said CheckFree was not going change its distribution strategy of remaining behind the scenes, believing customers want to receive electronic billing through their bank franchise. But it would try to help banks speed up marketing efforts by offering improved services and technology.
CheckFree's smaller electronic investment services division was also seeing more than 30 percent top line growth and 50 percent bottom line growth, while its software division was seeing better than 20 percent top line growth and more than 30 percent growth on the bottom line, he said.
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