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To: Box-By-The-Riviera™ who wrote (4660)	7/7/2000 7:17:43 PM
From: DEER HUNTER	Read Replies (2) \| Respond to of 5232

in keeping with the theme of the times....'when it rains it pours' and 'Rainy days and Mondays always get me down"... Friday July 7 5:22 PM ET Compuware Sees Disappointing 1st Quarter FARMINGTON HILLS, Mich. (Reuters) - Corporate software maker Compuware Corp. (NasdaqNM:CPWR - news) said on Friday it expects fiscal first-quarter earnings to fall roughly 50 percent below Wall Street's already diminished expectations, the latest mainframe software firm to warn of lackluster results. The company said it expected to post a profit of 7 to 9 cents per diluted share before amortization expenses tied to recent acquisitions. That is well short of the 15 cents a share analysts expected, according to First Call/Thomson Financial. Compuware, a maker of mainframe software programming tools, joined rivals Computer Associates International Inc. (NYSE:CA - news) and BMC Software Inc. (NasdaqNM:BMCS - news), two other top makers of mainframe software who told investors earlier this week their results would be weaker than expected. Citing weakness in the software market, Compuware estimated its revenues for the fiscal first quarter ended June 30 to be between $490 million and $510 million. Speak your mind Discuss this story with other people. [Start a Conversation] (Requires Yahoo! Messenger) Software license fee revenues are estimated in a range of $120 million to $130 million. Maintenance revenues are estimated at $115 million. Revenues from professional services are estimated in a range of $255 million to $265 million. ``Once again, we had several large deals that did not come in at the end of the quarter,'' said Compuware spokeswoman Beth Chappell. Computer Associates and BMC had both blamed slowing sales for mainframe computers tied to plans by International Business Machines Corp. (NYSE:IBM - news), the world's dominant maker of mainframe computers, to upgrade its machines later in 2000. Compuware's stock closed down 1-3/32 at 9-5/32 a share in Nasdaq trading after sinking to a new low of 8-21/32. That is below the previous 52-week low of 9-1/4 a share and well off the year's high of 40. For Compuware, it was the second consecutive quarter in which the company warned that earnings would fall short of analysts' expectations. In April it warned about weaker fourth-quarter results in its professional services and products divisions. Compuware shares fell 40 percent that day on the news. ``It's worse than people were expecting, although they weren't expecting a healthy quarter,'' said Chase H&Q analyst Christopher Galvin, who rates the stock ``market perform.'' ``We're in here for a long and probably painful period of recovery and turnaround efforts by the management team, but it's still a very difficult story,'' he said. Compuware President and Chief Operating Officer Joe Nathan told analysts during a conference call the company had reorganized its software products sales force to lessen the dependency on large deals. But in the end, eight large transactions failed to come through, and only 50 percent of the firm's expected mainframe upgrades materialized. ``We are going to aggressively look at all cost categories in the company with the idea of trimming them aggressively so that we can return to profit margins consistent with those that'' analysts expect, Nathan said. In response to a question, Nathan also said Compuware would have ``some conversations'' about launching a stock buy back given the price decline. Compuware has so far resisted stock repurchases because of its debt load. Compuware said its professional services business is on track with expectations. It also expects a minus 2-3 percent margin for the quarter in services. Compuware is scheduled to announce its results for the quarter on July 18. Email this story - (View most popular) \| Printer-friendly format