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Technology Stocks : BEA Systems (BEAS) - Undiscovered Growth Stock -- Ignore unavailable to you. Want to Upgrade?

To: wgh613 who wrote (1860)	5/7/2001 4:19:26 PM
From: Susan G	Respond to of 2477

The same rumors circulate EVERY single quarter, right before earnings.... the shorts want out before earnings IMO <g> They haven't missed OR warned yet....

To: wgh613 who wrote (1860)	5/8/2001 12:08:20 AM
From: Susan G	Read Replies (1) \| Respond to of 2477

BEA Systems Discovers High Expectations Come With Success By Joe Bousquin Senior Writer 5/7/01 10:04 PM ET The question perpetually posed by Wall Street is never what have you done for me lately? It's what are you going to do for me next week? On Monday, BEA Systems (BEAS:Nasdaq - news) felt the downside of success, as its stock fell nearly 9% on concerns that the company might not make its quarter when it reports earnings May 15. Of course, those numbers were pretty darn ambitious in the first place, given the fact that CEO Bill Coleman has been touting his company's prospects for the better part of the company's first quarter. Tech Stocks : Software BEA Systems Discovers High Expectations Come With Success By Joe Bousquin Senior Writer 5/7/01 10:04 PM ET The question perpetually posed by Wall Street is never what have you done for me lately? It's what are you going to do for me next week? On Monday, BEA Systems (BEAS:Nasdaq - news) felt the downside of success, as its stock fell nearly 9% on concerns that the company might not make its quarter when it reports earnings May 15. Of course, those numbers were pretty darn ambitious in the first place, given the fact that CEO Bill Coleman has been touting his company's prospects for the better part of the company's first quarter. In regular session trading Monday, BEA Systems ended down $3.09, or 8.6%, at $32.89. It's down 25.6% since April 20. When BEA reports its numbers next Tuesday, analysts expect it to earn 8 cents per share on revenue of $253 million, according to Multex.com. Despite Wall Street's worries lately over rough comparisons to year-ago numbers, those estimates assume 166% earnings growth and a 65% increase in revenue from the same period in 2000. But while chatter on trading desks Monday helped drive the stock down, analysts were confident about BEA's fiscal first quarter, which ended April 30. It what's gonna happen the rest of the year that has them a bit concerned. "There's not a doubt in my mind that they're going to make the quarter," says Andrew Roskill, an analyst at UBS Warburg who rates BEA a strong buy. "The real question is what's going to happen to backlog and to guidance. We don't expect the company to be raising guidance, as I don't think you get paid in the current environment for doing so." (His firm hasn't done underwriting for the company.) In other words, investors would likely be skeptical of any boosted numbers the company gave, and if the economy slows during BEA's fiscal second quarter, there would be huge downside. On the company's last conference call in February, BEA said it expected an increase in revenue of 46% to 48% for fiscal 2002 to $1.19 billion to $1.21 billion, and earnings per share 3 to 4 cents above analysts' (at the time) estimates of 37 cents. Analysts are looking for 2002 earnings of 40 cents per share and revenue of 1.2 billion for fiscal 2002, according to Multex. A BEA spokeswoman said the company couldn't comment on Monday's news, because of the mandated quiet period the company must follow before its earnings release. That said, it should be noted that software companies which haven't warned prior to their conference calls have made numbers this quarter, and BEA has not warned. But since its last conference call, and Coleman's own bullishness at a slew of Wall Street conferences, a lot has changed. Slowly but surely, analysts have been coming out to cut ratings on BEA. Generally, they cite a weak economy and stiffening competition. On Monday, Dain Rauscher Wessels analyst Sarah Mattson cut her rating on BEA from strong buy to buy, focusing in on just those things. "While we believe [first-quarter] results will be on target, we are lowering our estimates for the remainder of FY 2002 and for FY2003," Mattson wrote. "Key issues include lengthening sales cycles, smaller deal sizes and the potential of a slowdown in Europe." (Her firm hasn't done underwriting for the company.) Mattson's downgrade followed several others from her colleagues. In April, analysts at Prudential, Gerard Klauer Mattison and Salomon Smith Barney all cut their ratings on the stock. While economic concerns were a focus of those downgrades, increased competition from the likes of IBM (IBM:NYSE - news) in the applications server business also played a role. And one sticking point that always hounds this stock is its high valuation. After its tumble Monday, it still trades at 82 times fiscal 2002 earnings. That was one of Gerard Klauer Mattison analyst Gibbs Moody's main points for his April 25 downgrade of the stock. "We realize that BEAS has all but taken out a Super Bowl-sized ad proclaiming its ability to make its [April] quarter, but given its very high valuation and aggressive hikes in guidance, we feel upward estimate revision is limited and not likely sufficient to buttress BEAS against valuation downside," Moody wrote. "In the end, we believe BEA will be the ultimate market share winner due to first-move advantage and better technology. But we wonder at what cost?" (Moody's firm hasn't done underwriting for the company.) Ah, the sweet, sweet spoils of success. thestreet.com