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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (39463)	7/27/2001 4:31:24 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

VeriSign Up -2: Analyst Hesitant Over Stock's Valuation By Peter Loftus Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--With a dearth of appetizing goodies elsewhere in the technology sector, investors feasted on VeriSign Inc. (VRSN) shares Friday after the Internet company met second-quarter expectations and issued a positive outlook for the rest of the year. In 4 p.m. Nasdaq trading, VeriSign shares rose $6.93 to $54.10 on volume of about 17.5 million, more than twice the daily average. The stock was responding to VeriSign's quarterly earnings report issued late Thursday. The Mountain View, Calif., seller of Web addresses and Internet security services, said its second-quarter net loss widened to $11.19 billion, or $55.49 a share, from a loss of $452.9 million, or $3.37 a share a year earlier. Much of the latest quarterly loss stemmed from a non-cash charge of $9.9 billion to write down a portion of the goodwill for acquisitions made in the last two years. The biggest purchase was Network Solutions, for which VeriSign paid $19.6 billion in stock in June 2000. Excluding the one-time goodwill writedown and quarterly amortization, stock-based compensation charges and benefit for income taxes, Verisign earned $52.6 million, or 25 cents a share, compared with income of $10.3 million, or 7 cents a share last year. On a fully taxed basis, VeriSign would have earned 15 cents a share in the second quarter, a penny ahead of the Thomson Financial/First Call consensus estimate. Revenue rose 229% to $231.2 million from $70.3 million in the year-earlier period, which included only 22 days of Network Solutions results. VeriSign executives raised earnings estimates for the third quarter and full year, and backed existing revenue targets. They said the company's diverse businesses cushioned it from the technology sector downturn, and cited the importance of its services to anyone doing business on the Internet. JP Morgan H&Q analyst Raimundo Archibold said VeriSign "continues to see solid fundamentals in its businesses." Bear Stearns analyst Robert Fagin raised his 2001 estimates of earnings excluding items of 64 cents a share on revenue of $981.2 million from his former targets of earnings of 63 cents on $980.2 million. That's in line with the company's new guidance, which calls for earnings of between 60 cents and 63 cents a share on revenue between $975 million and $1 billion. Despite the general market ebullience surrounding VeriSign, Fagin pointed out that his "key hesitation" is the stock's valuation. He reiterated his "attractive" rating. At recent levels, VeriSign shares are trading at nearly 50 times Fagin's estimates of VeriSign's 2002 earnings. That's relatively pricey compared with the rest of the Internet sector. -By Peter Loftus, Dow Jones Newswires; 201-938-5267; peter.loftus@dowjones.com (END) DOW JONES NEWS 07-27-01 04:17 PM * end of story *