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Technology Stocks : Earnings: Small Cap Tech/ Software -- Ignore unavailable to you. Want to Upgrade?

To: SusieQ1065 who wrote (116)	1/23/2002 3:35:25 AM
From: 2MAR$	Read Replies (1) \| Respond to of 238

MERQ ($28.50~$32.50) PE=39 ...tops ests by 2c... profits drop, sees growth ahead By Lisa Baertlein PALO ALTO, Calif., Jan 22 (Reuters) - Mercury Interactive Corp. (NasdaqNM:MERQ - news) on Tuesday posted sharply lower fourth-quarter profits that beat Wall Street's consensus estimate and said it sees revenue growth of up to 15 percent in 2002. ADVERTISEMENT Mercury Interactive shares, which had finished the regular Nasdaq session $1.75 lower at $29.29, topped $32 in extended trade on Instinet in the wake of the company's earnings announcement and executive remarks indicating that it has a solid pipeline of big deals coming into the current earnings period. ``It was a clean quarter with some very constructive commentary,'' said Merrill Lynch analyst Chris Shilakes, who noted that management at the Israeli software maker tends to underpromise and overdeliver. ``Chances are those deals are in the pipeline that they're talking about,'' said Shilakes, who also noted that the Sunnyvale, California-based company kept the quality of its balance sheet very high. During the fourth quarter, the maker of products that enable software shops to test their own offerings saw pro forma earnings drop more than 50 percent to $12.1 million, or 14 cents per diluted share, from $25.8 million, or 28 cents per diluted share, in the fourth quarter last year. The results excluded charges related to amortization of goodwill and stock-based compensation as well as restructuring charges and a gain for the early retirement of debt. On average, two dozen analysts polled by tracking firm Thomson Financial/First Call had expected the company to earn 12 cents a share. Fourth-quarter revenue fell to $90.3 million from $97.5 million the previous year, beating the company's own forecast for revenues of between $84 million and $90 million. Net income -- including amortization of $12.8 million related to its acquisition of Freshwater Software and a $16.3 million gain, net of taxes, related to early debt retirement -- declined to $15.8 million from $34.2 million a year ago. ``Our fourth quarter was a strong finish to a challenging year,'' Amnon Landan, Mercury Interactive's president and chief executive, said during a conference call with analysts. Landan added that the company strengthened its position in the testing market and cemented early leadership in the performance management market during 2001. Mercury Interactive also is slated to release complimentary new products to sell to existing customers -- which include companies that buy its products to test whether the business automation software they have installed is working properly. ``We had been worried -- in light of the current economy and the slowdown -- that they hadn't hit bottom yet. It felt like all their businesses are working...'' Goldman Sachs analyst Tom Berquist said in an interview after the company's earnings call. While certain signals appear to be turning positive, company officials said IT budgets and spending patterns remain unclear and that their outlook for 2002 remains conservative. To that end, Landan said he expects first-quarter earnings of 9 cents to 11 cents a share on revenue of $84 million to $90 million. Mercury Interactive earned 18 cents in the year-earlier period. For the year, the company sees revenues growing 5 percent to 15 percent and falling between $380 million and $415 million. Per-share earnings are expected to hit within a range of 60 cents and 72 cents, representing growth of nil to 20 percent. Shilakes said the company's 2002 revenue outlook is roughly consistent with analysts' current expectations. Analysts with earnings forecasts at the high end of First Call's current range of 8 cents to 15 cents, however, will need to adjust their expectations down, he said. Since October, shares of Mercury Interactive have gained 65 percent and have outperformed the S&P 500 Index by 53 percent.