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Technology Stocks : Peregrine Systems Inc. (NASDAQ:PRGN) -- Ignore unavailable to you. Want to Upgrade?

To: Alastair McIntosh who wrote (450)	5/2/2002 12:59:50 PM
From: H James Morris	Read Replies (1) \| Respond to of 492

>>May 2, 2002 No news was definitely bad news yesterday for investors in Peregrine Systems. Shares of the San Diego-based business software maker plunged nearly 50 percent to $3.45 yesterday, its lowest point in four years, after the company said it would not report its quarterly and year-end earnings on time. The stock was the biggest loser in percentage terms and among the top net losers on the Nasdaq Stock Market. Peregrine makes software that helps companies track assets, such as computers, telephone lines and vehicles. In a tersely worded statement released after the market closed Tuesday, Peregrine said its new auditor, KPMG, needed more time to complete the work taken over from Arthur Andersen last month. Peregrine fired Arthur Andersen as its independent auditor April 2. Dozens of companies have done so in the wake of the Enron accounting scandal, but many have asked Andersen to stick around long enough to wrap up that quarter's earnings reports. Peregrine said its breakup with Andersen was effective immediately, but did not explain why. Peregrine had planned to release its fiscal fourth-quarter and full-year earnings today. The company did not reschedule the announcement, and said it would address the issue again next week. Delaying the reporting of earnings almost always makes investors jittery. It is unusual for companies to do so, and even rarer for companies to do so without rescheduling the announcement. Analysts are expecting Peregrine to report a pro forma loss of about 6 cents a share for the quarter. For the same period a year earlier, the company reported a pro forma profit of $24.8 million, or 16 cents a share. Peregrine would not comment further on the delay, and analysts and investors speculated yesterday about what might be happening at the company. Analyst Bert Hochfeld from Montauk Capital Partners suggested on the ON24 online financial news network that Peregrine is not distancing itself enough from the idea that more serious issues, such as fraud, might exist at the company. Hochfeld said he also wondered whether Peregrine was accounting correctly for the revenue from products that may have entered the sales process but have not yet reached the end user. Peregrine said it would not respond to Hochfeld's comments. Other analysts downplayed the news, saying new auditors simply need more time to complete an annual audit. "It is unlikely a serious audit problem with Peregrine's financials is causing the delay," Bob Austrian of Banc of America Securities said in a report. Austrian maintained a "buy" rating for Peregrine. The U.S. Securities and Exchange Commission conducted a review of Peregrine in the middle of last year, and the company also underwent the normal financial scrutiny that comes with a merger when it acquired rival Remedy, Austrian said. That also suggests the company has no substantial accounting or auditing issues, he said. First Albany analyst Damian Rinaldi said he thought investors backed away from the stock yesterday because of concerns that there may be a problem. But they could be wrong, he said. "In looking at the situation that Peregrine is in, I can point to a number of reasons why a delay isn't unreasonable," Rinaldi said. Analysts at CIBC World Markets weren't so optimistic. They downgraded Peregrine's stock from "buy" to "hold." uniontrib.com