This helps explain some nervousness. All it really means is a great buying opportunity for a fantastically well run and successful company.
DOW JONES NEWS SERVICE
VISIO OFF, 4Q : SILENCE SEEN BY SOME AS NEGATIVE OMEN
By Paula L. Stepankowsky
LONGVIEW, Wash. (Dow Jones)--Speculation that Visio Corp.'s (VSIO) fiscal fourth-quarter earnings may come in lower than Wall Street's expectations was behind an 18% drop in the company's stock price earlier Tuesday, analysts said.
The Seattle-based supplier of business-diagraming and technical-drawing software, at a BT Alex. Brown conference Monday, declined to comment on fourth-quarter expectations, citing a quiet period in advance of earnings, said Robert Kugel, an analyst with First Albany Corp.
Kugel said that while Visio has a strict policy about not commenting on earnings expectations during its quiet period, some investors have taken the company's silence as a sign that fourth-quarter earnings might be lower than a First Call Corp. estimate of 30 cents a share.
"If you wanted to become hysterical, you could conclude that because they refused to answer any questions, that that has some sort of insidious meaning," said Kugel.
Rick Scocozza, an analyst at Bear Stearns, said he has also heard rumors about the company's fourth quarter, a concern he doesn't share.
"In fact, we are remaining pretty positive on it," Scocozza said. "We are actually forecasting 31 cents a share, which would be a penny better."
Visio officials could not be reached immediately for comment. The company's fiscal fourth quarter ended Sept. 30.
Pdts Well-Positioned For Long Term: Analysts
First Albany analyst Kugel said his own estimate for Visio's fiscal fourth quarter is 28 cents a share, two cents below the First Call consensus estimate. Still, he believes Visio will continue to do very well.
"The only issue people have is what is the outlook for the economy and what are the implications on Visio's business," Kugel said.
Scocozza, of Bear Stearns, said he believes Visio's niche in business drawing and diagraming for information technology professionals is a good one. He said the company has two key products: Visio Professional and the newly announced Visio Enterprise 5.0.
"Both of these are long-term drivers, and both products are positioned to do well," Scocozza said.
But it's not surprising that software stock prices are volatile at the moment, he added.
"You have a lot of nervousness in the market in general with the software space," he said. "A lot of these companies have been beaten up, and I think it's going to just take some earnings announcements to get a little bit of confidence that these businesses aren't disintegrating."
Visio recently traded Tuesday at 15 1/2, down 9.5%, on Nasdaq volume of 2.4 million shares, compared with average volume of 530,000. Shares in the company fell Thursday to a 52-week low of 14.
Visio wasn't the only casualty of the BT Alex Brown conference. Kugel said Peoplesoft Inc.'s (PSFT) late-Monday cancellation of a scheduled Tuesday appearance at the conference apparently triggered a 17% drop in Peoplesoft's stock price.
"Peoplesoft elected not to show up at Alex Brown, and their stock is down today," Kugel said.
- Paula L. Stepankowsky; 360-636-2008
Co. Would Comment On Earnings Deviation
Steve Gordon, Visio's chief financial officer, told Dow Jones that despite the company's policy of not commenting during its quiet period, it would let investors know if it believed quarterly earnings would be materially different from expectations.
"If we were materially short on our earnings, we would feel obligated to let people know that as soon as possible and wouldn't necessarily wait until the release date to let them know about it," Gordon said.
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