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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: AlienTech who wrote (5922)	8/26/2000 10:42:48 PM
From: ms.smartest.person	Respond to of 6021

PGP Working On Patch For Encryption Software Flaw (URL: crn.com By Marcia Savage CRN Santa Clara, Calif. 2:58 PM EST Fri., Aug. 25, 2000 PGP Security, a division of Network Associates, said Friday it is working on fixes for a flaw in its e-mail encryption software that makes it vulnerable to malicious attackers. The bug was discovered in PGP (pretty good privacy) versions 5.5 through 6.5.3 by researcher Ralf Senderek, according to the CERT center at Carnegie Mellon University. PGP, based here, says it learned of the bug Thursday morning and had staff working on a patch late into the night. Fixes for the flaw were scheduled to be posted Friday afternoon on PGP's Web site. The security flaw pertains to a feature in certain versions of the PGP software that allows authorized extra decryption keys to be added to a user's public key certificate, CERT says. The bug allows an attacker to alter the user's public certificate and read messages. "We're not aware of any customer who has had any data compromised or loss of security because of this bug," says Mike Wallach, president of PGP Security. "We think this is a very low probability and an unlikely scenario, but the possibility exists for someone to target an individual and, if given the right circumstances, to read their encrypted e-mail." Wallach says the company published the software's source code for peer review with the intention of uncovering flaws and responding to them. "We expect to have people scrutinize the code and look for vulnerabilities and let us know when they're found," Wallach says. "That's a way for us to know we have the most secure and highest quality encryption." Wallach says PGP was not notified ahead of time by the researcher who found and published the security flaw. "We don't think that's a proper way for this process to have proceeded," he says. --------------------------------------------------------------------------------

To: AlienTech who wrote (5922)	10/17/2000 9:20:35 AM
From: deeno	Read Replies (2) \| Respond to of 6021

report on earnings if anyone cares Price: $20.63 Estimates (Dec) 1999A 2000E 2001E EPS: -$0.25 $1.01 $1.20 P/E: NM 20.4x 17.2x EPS Change (YoY): NM 18.8% Consensus EPS: $0.98 $1.19 (First Call: 12-Oct-2000) Q4 EPS (Dec): $0.24 $0.30 Cash Flow/Share: NA NA NA Price/Cash Flow: NM NA NA Dividend Rate: Nil Nil Nil Dividend Yield: Nil Nil Nil Opinion & Financial Data Investment Opinion: D-3-2-9 Mkt. Value / Shares Outstanding (mn): $3,053.2 / 148.5 Book Value/Share (Sep-2000): $2.89 Price/Book Ratio: 7.1x ROE 2000E Average: NA LT Liability % of Capital: NA Est. 5 Year EPS Growth: 20.0% Stock Data 52-Week Range: $37.19-$16.25 Symbol / Exchange: NETA / OTC Options: Chicago Institutional Ownership-Spectrum: 37.6% Brokers Covering (First Call): 12 ML Industry Weightings & Ratings Strategy; Weighting Rel. to Mkt.: Income: Underweight (07-Mar-1995) Growth: Overweight (07-Mar-1995) Income & Growth: Overweight (07-Mar-1995) Capital Appreciation: Overweight (28-May-1993) Market Analysis; Technical Rating: Below Average (25-May-2000) The views expressed are those of the macro department and do not necessarily coincide with those of the Fundamental analyst. For full investment opinion definitions, see footnotes. Investment Highlights: Solid quarter highlighted by upside in revenue (+$2M) and EPS (+$0.03); tempered by decrease in deferred revenue (-$10M). Revenue of $226M (+19%) and EPS of $0.27 (+80%) exceeded ML est. of $224M and $0.24. Deferred rev. decreased by $10M to $161M; management attributed sale of more perpetual licenses vs. 2-year contracts. EPS upside of 3 cents due to 2% increase in operating margins to 19.5% (primarily G&A). Raising CY01 EPS estimate from $1.18 to $1.20; maintaining rev. estimate of $1,062M. Maintain intermediate-term neutral rating as the company rebuilds; waiting for signs of new product traction for renewed enthusiasm. Fundamental Highlights: New products address security / management of wireless, optical and broadband networks. More partnerships expected with appliance vendors in anti-virus and firewall business. Europe was weak accounting for 29% of rev. (vs. 33% in Q2:00). DSOs were down to 66 days (-2); cash down by a modest $5M despite 1.4M share buyback. Network Associates, Inc. – 17 October 2000 (Continued) 2 Q3 Results Highlighted By 3 Cent EPS Upside Network Associates reports solid Q3:00 results. Revenue of $226M (+19%) and EPS of $0.27 (+80%) exceeded ML estimates of $224M and $0.24. All business units reported steady sequential growth in line with expectations. Deferred revenue decreased by $10M to $161M. Management attributed this to the rise in perpetual licenses due to increased hardware/appliance sales. In the case of software sales, NETA has typically sold 2-year contracts, which results in deferred maintenance revenue. We expect the trend to continue – more backlog being converted to recognized revenue earlier coupled with a decline in deferred revenue. EPS upside of 3 cents was due to 2% increase in operating margins to 19.5%. This increase was fueled by lower G&A expenses (down 1.5% sequentially). We expect margins to continue improving. Accordingly we have increased our CY01 EPS from $1.18 to $1.20. The balance sheet continues to remain strong. DSOs decreased by 2 days to 66 days. cash balance decreased by a modest $5M to $796M despite 1.4M ($30M) share buyback. Europe was weak accounting for 29% of rev. (vs. 33% in Q2:00). Management stated that demand was seasonally weak and the company had a very modest exposure ($1- 2M) to the decline in the Euro. Update on Business Units McAfee Antivirus accounted for 50% of Q3 revenue with Enterprise Policy Orchestrator driving growth. New product releases include VirusScan for handheld devices, VirusScan Thin Client, Guard Dog for Palm, and Enterprise Policy Orchestrator (enterprise AV policy management). Partnerships in Q3 included Nokia (bundle McAfee into appliance), and IBM Global Services (offer AV and Orchestrator solutions). Customer wins include Arch ($1M+), Ford ($1.4M deal), Netstar ($1M+), Unit4 ($1M+), Rolls Royce, HealtheManager.com, Covalent and HypoVeriensbank. Sniffer accounted for 30% of Q3 revenue with Sniffer 4.0 showing signs of traction. This product has been successfully deployed at over 250 customers (Alcatel, Exodus and WebVision). Key partnership this quarter with Symbol integrates Sniffer into Symbol's wireless network management offering. Customers wins include CitiGroup ($2M deal for European operations), NTT Docomo (wireless), and Exodus. Magic accounted for 7% of Q3 revenue. New offerings include the Magic Management Center (enhanced graphics for help desks) and MagiCall (server-based telephony integration to Magic Service Desk users). Customer wins include Wells Fargo, Hitachi Semiconductors and St. John's University. PGP accounted for 9% of Q3 revenue. Product releases included PGP 7.0, (software suite that integrates management of personal firewalls, intrusion detection, VPN client, and encryption) and Gauntlet 6.0 (firewall/VPN). Customer wins include Vodafone; PGP will be used to secure HR records across 23 countries. myCIO.com and retail sales accounted for 4% of Q3 revenue. Partnerships include EdgeMail, SonicWall, Commtouch, JamCracker, Arche/Siemens, Pinkerton and LoudCloud. Waiting and Watching We are increasing our estimates modestly to reflect Q3 upside. We are raising CY01 EPS estimate from $1.18 to $1.20; maintaining rev estimate of $1,062M. We are maintaining our intermediate neutral rating as the company rebuilds. We are waiting for signs of new product traction for renewed interest in the stock. We believe that the analyst day scheduled for November 2 nd will give us a little more insight into the progress of the new products.