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Technology Stocks : Sterling Commerce (SE)
SE 142.31-8.3%3:59 PM EST
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To: Bob Howarth who wrote (119)2/5/1999 12:12:00 PM
From: Sawtooth  Read Replies (2) of 341
 
NEW YORK, Feb 5 (Reuters) - Shares of Sterling Commerce
Inc. SE.N tumbled Friday morning after the company reported
what Wall Street analysts said were smaller-than-expected first
quarter software revenues.
Shares of the maker of electronic commerce software
products traded at 31-1/2 after a delayed opening, down
10-15/16 from Thursday's close.
On Thursday the company posted profits of $0.33 per share
on revenues of $140.8 million for the first quarter, matching
Wall Street forecasts.
But analysts said Sterling's software revenues were $49.5
million, below the expected $55-$60 million.
"They missed on their software revenue numbers, which were
already lowered from two quarters ago," said First Albany
analyst Ullas Naik. "The concern is that if software revenues,
which are their higher-margin revenues, are slowing down, what
impact will that have on margins going forward and on earnings
per share?"
Naik said he was keeping a neutral rating on Sterling but
was considering trimming his $1.60-per-share earnings estimate
for 1999.
Warburg Dillon Read LLC analyst Gibbs Moody cut his rating
on Sterling to hold from buy, saying the drop in software
revenues was "disquieting" because such revenues ultimately
drive the company's service and support revenues.
Moody cut his 1999 earnings estimate for Sterling to $1.53
per share from $1.60.

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