That Xcellnet acquisition you hated so much has now been sold. We also have an upside earnings preannouncement. I think this stock is moving higher:
Thursday January 27, 4:03 pm Eastern Time
Company Press Release
SOURCE: Sterling Commerce, Inc.
Sterling Commerce Announces Preliminary First Quarter Results
Results Exceed Expectations and Include Strong Performance from New Offerings; Company Also Announces Agreement for Sale of XcelleNet
COLUMBUS, Ohio, Jan. 27 /PRNewswire/ -- Sterling Commerce, Inc. (NYSE: SE - news), a worldwide leader in providing E-business integration solutions, today announced preliminary financial results for its first fiscal quarter ended December 31, 1999.
For the first quarter, the Company expects revenues to be in the range of $137 million to $138 million and earnings per share to be $.33 to $.34. This excludes the expected results from the XcelleNet business and the expected charge related to its sale. The analysts' consensus estimate for revenues and the First Call consensus estimate for earnings per share for the first quarter were approximately $135 million and $.31, respectively. The estimates also exclude the expected results from the XcelleNet business and the expected charge related to its sale. The Company expects to have approximately 81 million weighted shares outstanding.
The Company also announced it has entered into an agreement for the sale of the XcelleNet business with Francisco Partners, a leading private equity firm focused exclusively on the information technology industry. As previously announced, the XcelleNet business is not closely related to the Company's core E-business strategies. The sale is part of the Company's fiscal 1999 realignment plan aimed at realigning the Company's resources to its core strategies. The sale price will be approximately $50 million, subject to adjustment, and will consist of cash and a $10 million buyer note issued to the Company. The closing is subject to customary conditions. In connection with the sale, the Company expects to take a $50 million charge in the first quarter. The Company expects first quarter revenues and earnings per share, including the XcelleNet business and excluding the charge from its sale, to be in the range of $150 million to $151 million and $.30 to $.31, respectively. Including the charge from this sale, the Company expects first quarter earnings per share to be in the range of $(.28) to $(.27).
''We are pleased with the progress we have made implementing our realignment plan, which included rapidly moving resources to focus exclusively on targeted growth markets and the divestiture of XcelleNet,'' said Warner C. Blow, CEO of Sterling Commerce. ''Our new offerings are gaining traction in the market place and contributed to the strong first quarter results. We continued to meet or exceed the goals we set for building the business around these target markets.''
For the E-community management market, the Company introduced E-Business Centre, a comprehensive, integrated Web marketplace that allows companies to exchange information, transact business, and streamline relationships with customers, suppliers and other communities globally. ''What sets us apart in this emerging market is our ability to build e-marketplaces at an enterprise- level, an industry-level, and perhaps, most importantly, on a global basis,'' said J. Brad Sharp, President and COO of Sterling Commerce. Overall, the Company enjoyed strong growth in building, managing and servicing E- communities with the addition of over 1400 new customers such as Ourhouse.com, Pella Corporation, and Uniden America to an installed base of more than 27,000 E-community management customers.
The Company continued to extend its focus in the E-business communications infrastructure market with the delivery of CONNECT:Enterprise. This is a solution to move and manage any data within and between enterprises using the Internet, at any time, anywhere, and fully secured. The Company secured ten new users including UMB Bank, Bank of New York, Qwest, MCI/Worldcom and ENEL, a top European electricity provider.
Sterling Commerce further expanded its capabilities in the E-business process integration market by introducing GENTRAN:Catalyst, a new message broker offering aimed at the rapidly growing enterprise application and Web integration markets. Fundamentally, it provides companies a way to integrate applications inside the enterprise. New customers for this solution included Standard Register and Leica. Additionally, the Company closed sixteen new GENTRAN:WebSuite deals with companies like Harley Davidson, The Limited and Alcan Aluminum.
The Company also announced considerable progress in the E-Sourcing market where it provides resources and expertise to solve customer business problems through managed E-business integration services and outsourcing. The Company added eight Web consulting engagements with large companies like The Limited, Costco, and Johnson Controls. Finally, six new outsourcing deals were signed with leading companies such as Baltimore Gas and Electric, Owens Corning, Arch Communications and Medcenter.com.
''Entering 2000, Sterling Commerce is a focused, Internet-driven organization,'' commented Mr. Blow. ''We are excited about the opportunities available to us to help our customers benefit from E-business. Our offerings are at the heart of this rapidly growing industry. With our industry experience, deep customer relationships, and leading edge solutions capabilities, we are looking forward to continuing to expand our position as the leading E-business integration solution provider.''
The Company has not finalized its results for the first quarter. Except for this announcement, the Company does not intend to provide further detail on its first quarter results until it announces final results and files its Form 10-Q in mid-February. |
