J.D. Edwards debut! (JDEC) Message Board

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Technology Stocks : J.D. Edwards debut! (JDEC)

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To: Sawtooth who wrote (311)	2/12/1999 12:15:00 PM
From: Sawtooth	of 583

briefing.com 2/12: J. D. EDWARDS & CO. (JDEC) 13 3/8 -4 1/2. Just when investors thought this software developer had already hit bottom, it was just a temporary pause as the company continues to see a drop-off in license-fees depressing results. The earnings warning is par for the course, considering that two other software developers have experienced similar earnings shortfalls. However, given the trend that has been evolving in this sector for the past couple of quarters, it was assumed that JDEC had made the necessary adjustments to counter the drop in sales and increased competition. This proved not to be the case as late yesterday this enterprise resource planning software company warned that fiscal Q1 results would fall well below Wall Street expectations. It sees revenues in the range of $218 million and $223 million and earnings between $0.02 and $0.04 a share. This is at a minimum five cents below the First Call estimate of $0.09 a share and also below year-ago profit of $0.06 a share on revenues of $178.3 million. On a sequential basis, revenues are dropping fast as well, falling by a minimum of 27% from the Q4 level of $307.13 million. Of course there is always a seasonal drop on a percentage basis, between Q4 and Q1, but it typically is in the teens and not the high twenties. To be sure, much of the negative news that has hurt the enterprise resource planning sector has prompted the shares of JDEC to retreat from the $48 level in late September to just under $20. However, this was before yesterday's earnings warning which has prompted the stock to retreat further as both Prudential Securities and CS First Boston have downgraded the stock and cut earnings estimates. With a very limited sales and earnings view going forward, it seems the stock has found a new trading range in the mid-teens as there seems to be little prospects for a quick turnaround.

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