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Here's the reason for the sell-off...I said the CC would be critical..
Computer Horizons CFO Sees '99 EPS Of
$1.44-$1.45/Shr
By Maria V. Georgianis
NEW YORK (Dow Jones)--Citing its transition away from highly profitable year 2000
services, Computer Horizons Corp. (CHRZ) Tuesday lowered its guidance for 1999
per-share earnings by about 16%, Chief Financial Officer William Murphy told Dow
Jones.
In recent Nasdaq trading, Computer Horizons hit a new 52-week low, falling 2 1/16, or
12.1% at 15, on 1.86 million shares compared to average daily volume of 819,698. Its
prior 52-week low of 15 1/2 was set Feb. 10.
The new guidance is for 1999 earnings of $1.44 to $1.45, Murphy said in an interview
with Dow Jones. Computer Horizons told Wall Street analysts about the lower guidance
early Tuesday during its fourth quarter conference call.
Prior to the call, analysts had estimated 1999 earnings of $1.73 a share, according to
First Call Corp. The computer services company before the market's open reported
1998 earnings of $1.42 a diluted share, compared with year-ago earnings of 88 cents,
both excluding items.
As a percentage of total revenue, Computer Horizon's year 2000 services are expected
to decline more precipitously than analysts had expected this year because companies
are finishing their year 2000 remediation projects.
During the current quarter, year 2000 services are shaping up to account for 12% of
revenue, Murphy told Dow Jones. By the fourth quarter of 1999, these services may
account for about 7% of total revenue, he said.
Analysts expected Computer Horizons' year 2000 services to account for about 20% of
its 1999 revenue, compared with 30% in 1998.
In lowering the estimate, Computer Horizons sees year 2000 services revenue in 1999
between $76 million and $77 million less than last year. "What we're saying is year 2000
business is no more than $60 million in 1999," he said.
In 1998, year 2000 services accounted for $136 million to $137 million of total revenue.
The company's fourth quarter operating earnings of 38 cents a share met the First Call
view and exceeded year-ago earnings of 29 cents.
Computer Horizons, which has been attempting to expand other types of computer
services as its year 2000 business winds down, reported fourth quarter revenue of $143
million, up 44% from year-ago revenue of $99.6 million.
Year 2000 services, wherein the company remediates businesses' computer systems to
be ready for the millennium date change, accounted for 21% of the quarter's revenue.
Bill
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