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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: miklosh who wrote (63559)	6/30/1999 2:53:00 PM
From: miklosh	Respond to of 132070

Mike, Here's the latest on KEA: dailynews.yahoo.com Keane Issues Warning On Sales, Profits By Tony Munroe BOSTON (Reuters) - Information technology firm Keane Inc. (AMEX:KEA - news) warned on Wednesday of lower sales and profits because of a drop-off in millennium computer bug related business, combined with softness in other operations. Keane said it expects to report second quarter earnings per share of 37 cents on sales between $280 million and $282 million. Analysts had expected 41 cents a share. The company said for the full year ending Dec. 31 it expects revenue to be flat with 1998's $1.1 billion, while earnings should be in the range of $1.40 to $1.50 a share, compared with $1.47 before acquisition costs and $1.33 after such costs in 1998. Analysts expected 1999 earnings of $1.63. The announcement tripped Keane's already-foundering stock, as Keane shares dropped $3 3/16 to $20 13/16 on the American Stock Exchange. Keane traded as high as $60 15/16 a year ago. ''This is a company that generated about $370 million worth of Y2K revenues in 1998. That's a pretty significant amount of revenue they have to replace,'' said analyst Moshe Katri of S.G. Cowen. He said many firms this year began handling Y2K issues in-house, at the expense of IT service providers. The Y2K issue, or millennium bug, is the problem computers will face if they are unable to recognize the last two digits as the year 2000 rather than 1900. Large, data-heavy companies such as banks, have spent tens of millions of dollars apiece to prevent such a problem from arising. Chief executive John Keane said the company began to see in June ''clear indications of a softening in non-Y2K revenue,'' which will erode the 30 percent to 35 percent year-over-year growth rate Keane enjoyed in recent quarters. Keane blamed the slowdown in non-Y2K-revenue on reluctance by customers to undertake new IT projects until they've resolved their Y2K-related issues. Nevertheless, Keane said the company can post average annual revenue growth of 20-to-25 percent over a three-to-five year range, ''with earnings growth at a slightly faster pace.'' In April, Keane said Y2K-related sales had been less-than-expected during the first quarter. Also in April, Keane lowered earnings expectations for 1999. Analyst Damian Rinaldi of First Albany said he will ''stand pat'' on his accumulate rating on the stock, which he said should appreciate by 10 percent or 20 percent over the next year, although it could drop before rising. S.G. Cowen's Katri, whose firm launched coverage of the stock Wednesday with a ''neutral'' rating, said he would cut his 1999 earnings forecast of $1.58.

To: miklosh who wrote (63559)	6/30/1999 5:12:00 PM
From: Greg Jung	Read Replies (1) \| Respond to of 132070

(kea) Miklosh, the damage is worse than just a shy quarter in Keane, it shatters the myth that they will maintain the canonical growth expectations through ramp down of the y2k fixit revenues. And there is a lot of lost credibility, I would suppose, they are very late in admitting to much of a slowdown. So a drop in multiple to nearer the norm for small shops is in order. Greg