Friday January 15, 1999 (08:49 am ET)
S&P Reiterates Accumulate on Platinum Technology
NEW YORK, Jan. 15 (Standard & Poor's) - S&P reiterated its (accumulate) recommendation on shares of Platinum Technology International (PLAT) despite the company's disappointing EPS pre-announcement.
Analyst Scott Kessler notes that PLAT expects Q4 and 1998 EPS of $0.40 and $0.82, respectively, markedly below his estimates. He says the shortfall is due to services business problems: poor performance in Germany and the U.K., lower than expected demand for training offerings, and flat Y2K services growth. He adds that despite organizational and management changes made to address these issues, he anticipates much slower services revenue growth for 1999.
However, Kessler says that PLAT's software business is still strong, and despite likely short-term weakness, the shares are attractive at 16 times his 1999 EPS estimate of $1.15, reduced from $1.35.
Neil |
