Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : EARNINGS REPORTING - surprises, misses & more -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (330)	10/14/2000 10:07:19 PM
From: 2MAR$	Read Replies (1) \| Respond to of 762

NMSS...profit tops views but stock slammed (UPDATE: Recasts lede, updates with analyst comments, conference call details, stock movement) NEW YORK, Oct 12 (Reuters) - Communications software maker Natural MicroSystems Corp. (NasdaqNM:NMSS - news) on Thursday reported a better-than-expected third-quarter profit but the stock fell 20 percent in what analysts described as an ``unjustified'' sell-off. Stocks generally were having a bad day. The Dow Jones industrial average (^DJI - news) was down 311 points, or about 3 percent, and Nasdaq was off 55 points, or 1.75 percent. Shares of Framingham, Mass.-based Natural MicroSystems tumbled $10-3/8 to $42 on Nasdaq, further aggravating a month-long slide that last week forced the company to shelve plans for a secondary common stock offering. In mid-afternoon trading, the stock was among both the day's top net and percentage losers and had dropped to as low as $36. ``It's completely unjustified,'' Deutsche Banc Alex. Brown analyst James Wade said of the sell-off. ``It makes absolutely no sense. This company's business is fundamentally better today than it has ever been before.'' ``I think it's uninformed selling,'' Ladenburg, Thalmann & Co. analyst Donald Newman said. Before the market opened, Natural MicroSystems said for the three months ended Sept. 30 it earned $5.8 million, or 15 cents per share, excluding unusual items and the amortization of goodwill and other intangibles. A year earlier it had a loss of $2.6 million, or 11 cents per share. Analysts on average had expected the company to earn 8 cents per share, according to research firm First Call/Thomson Financial. Including the unusual items and amortization expenses, Natural MicroSystems reported a net loss of $15.2 million, or 42 cents per share, compared with a loss of $2.8 million, or 12 cents per share, a year earlier. Revenue doubled to $40.5 million, driven by demand for its products that process voice, data and fax signals over converged networks. Top customers include Lucent Technologies Inc. (NYSE:LU - news) and Motorola Inc. (NYSE:MOT - news). ``Our growth continues to be driven by the burgeoning converged communications markets,'' Natural MicroSystems Chairman and Chief Executive Officer Bob Schechter said in a statement. In a conference call following the release of the results, company executives said they expect fourth-quarter earnings to grow 10 to 12 percent from the third quarter, guidance they said was consistent with previous forecasts. That sequential growth should moderate to about 5 percent going into the first quarter 2001, they said, but then should resume a double-digit pace after that. The first quarter is traditionally a slow period for revenue and capital spending by its major telecommunications clients. Analysts currently expect the company to earn 12 cents per share in the fourth quarter and 15 cents per share in the first quarter next year, according to First Call. Company officials told analysts on the call that they still expect overall revenue growth for the year of about 80 percent. Next year's top line should grow about 70 percent, they said. Both Ladenburg's Newman and Deutsche Banc's Wade said the company's outlook is consistent with their past statements, including their forecast of a slowdown at the start of next year. ``They've been saying this for some time,'' Newman said. ``That doesn't spook me for Q1. It's normally a down quarter in that sector and they're saying up 5 percent.'' Apart from getting caught in a very bad day for stocks in general, Wade said Natural MicroSystems shares could be facing additional pressure from investors who'd been looking for an even higher third-quarter result. ``Seems that there were people that had whisper numbers that might have been even higher than what they reported,'' Wade said. ``But this is completely unjustified. This is a tippy market and fundamentally a great company and this is a great opportunity to get in.'' Last week, the company shelved plans for a secondary offering of 2 million shares of common stock, opting instead to sell $175 million in convertible notes, because of recent weakness in its stock price. After rising to a high of $78-5/8 in the middle of September, the stock has tumbled nearly 47 percent.