Just re-read PSFT Q2 report. The management's expressed concern as listed can be real! Has this been discussed among the analysts then?
Appreciat if anyone can enlighten me....I am new ti this. Thanks.
Excerpts from Q2 report:
Special Note
The Business Outlook and certain other announcements
referenced above contain forward-looking statements as
defined in the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to
risks and uncertainties which could cause actual results
to differ materially from those anticipated. Such risks
and uncertainties include, but are not limited to:
· Contracting activity may be impacted by the increasing
intensity of competition from other application vendors,
increasingly difficult and protracted contract
negotiations, fluctuations in customer demand, and the
timing and complexity of large transactions. During the
second quarter of 1998, certain competitors became
more aggressive with their product pricing and license
fee payment terms. If this trend continues, it may have
an adverse impact on PeopleSoft's future results and
the Company's ability to meet financial expectations in
the future. In addition, contracting activity may be
impacted by the Company's ability to grow it's direct
sales capacity and the timing, quality and acceptance of
new software products and releases, the influence, if
material, of the Year 2000 problem on overall aggregate
demand, and general economic, seasonal and industry
conditions;
· License agreements executed during the quarter may
not meet the Company's revenue recognition criteria; as
a result, the Company may meet or exceed its forecast
of aggregate contracting activity, but not meet its
forecast for license revenues. In addition, Statement of
Position (SOP) 97-2, "Software Revenue Recognition"
was issued in October 1997 and addresses software
revenue recognition matters primarily from a conceptual
level and does not include specific implementation
guidance. The SOP supersedes SOP 91-1 and is
effective for transactions entered into for fiscal years
beginning after December 15, 1997. Based on its
reading and interpretation of SOP 97-2, the Company
believes it is currently in compliance with the final
standard. However, detailed implementation guidelines
for this standard have not yet been issued. Once issued,
such detailed implementation guidance could lead to
unanticipated changes in the Company's current
revenue accounting practices, and such changes could
be material to the Company's revenues and earnings;
· The Company's expense levels are based, in
significant part, on the Company's expectations as to
future revenues, and are therefore relatively fixed in the
short term. If revenue levels fall below expectations,
operating margins and net income will be
disproportionately adversely affected. In addition, the
Company continues to evaluate opportunities to
enhance and expand its technology and product
offerings through potential partnerships, licenses or
acquisitions. Such activities, to the extent they are
material, could adversely impact the Company's
operating results;
· The Company has experienced an extended period of
growth, which has resulted in a significant expansion in
the number of its employees. As a consequence, the
Company may commit to real estate projects in order to
expand its operations to accommodate expected growth.
Such real estate projects typically have a lead time of
over one year from commit date to occupancy. There
can be no assurance that the anticipated growth
projections will be realized, and therefore, the Company
may be subject to increased fixed costs which cannot be
recovered from operations, resulting in material
reductions to net income and cash flows;
· Other risks which are detailed in the Company's filings
with the Securities and Exchange Commission,
including, but not limited to, the March 31, 1998
Quarterly Report (Form 10-Q) and the 1997 Annual
Report to Shareholders (Form 10-K). |
