Noel, the drop came when the Wind CFO told analysts that the company might struggle to beat their estimates for revenues in the current quarter. Prior to this, Wind always had more than enough revenues, and managed them down:
ALAMEDA, Calif.--(BUSINESS WIRE)--Jan. 22, 1999--Wind River
Systems, Inc. (NASDAQ:WIND) today announced that, while it cannot be
certain as to the results for its fourth quarter ending January 31,
1999, it presently estimates that it will record revenues for the
quarter of between $37 million and $39 million, or $128 million to
$130 million for the fiscal year 1999, which would constitute a
year-over-year growth of 39% to 41%.
If these revenues are achieved, they would yield earnings per
share for the quarter of $0.27 to $0.30, and $0.89 to $0.92 for the
fiscal year 1999, an annual increase of 37% to 42% (excluding the
one-time charge in the fourth quarter of fiscal 1998).
"While we cannot predict with any certainty whether our revenue
will meet or exceed our expectations, we do anticipate another solid
quarter of results and remain confident as to our prospects for fiscal
2000," commented Richard W. Kraber, vice president and CFO.
then:
NEW YORK -(DOW JONES)- Wind River Systems Inc., a supplier of
specialized operating systems, saw its shares fall 35% Friday on
speculation that the company would miss analysts' earnings estimates.
"I heard that the stock was moving because Lehman was talking to the
company and had hinted that they might not meet estimates," said John
O'Brien, a trader with Everen Securities Inc. in Chicago. "Which would
be strange since they were beating estimates pretty regularly."
Lehman Brothers Inc. analyst Michael Stanek, however, said he had
been misinterpreted. "Wind is a company that has beat its number for 20
quarters," he said, "and my feeling after talking with the company is
that they will meet estimates this time, rather than beat them, but they
will certainly not miss the number."
Stanek is confident Wind River (WIND) will meet a mean estimate of
analysts surveyed by First Call of 29 cents a share in the fiscal fourth
quarter, ending January. But he added that he made a "slight
readjustment" in his fiscal year 2000 estimate, revising it to between
$1.10 and $1.15 a share from $1.19.
Shares of Wind River on Friday were down $17.31, or 35%, at $32.19 on
Nasdaq volume of nearly 8.5 million shares, compared with average daily
volume of 270,800.
and:
Lehman Brother analyst Michael Stanek said in a brief note
that Kraber has indicated that the fourth quarter is "more
back-end loaded than normal." Lehman is looking for the fourth
quarter to match estimates rather than provide the "usual $0.01
to $0.02 upside quarter that investors have come to expect".
My opinion: This may or may not have something to do with slower than expected growth of I2O. Compaq and others are promoting their own alternative, FutureIO.
As per my previous post, the mutual funds took this to mean Wind's growth is slowing and that Msft is eating their lunch.
They dumped the stock.
IMHO, it is time to buy. wj |
