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Technology Stocks : Sonic Solutions (SNIC) -- Ignore unavailable to you. Want to Upgrade?

To: tonyt who wrote (144)	2/19/1998 4:56:00 PM
From: tonyt	Read Replies (1) \| Respond to of 553

NEW YORK -(Dow Jones)- Shares of Sonic Solutions rose sharply Thursday, after rising 20% Wednesday amid indications the company is addressing its cost-structure problems and optimism over the release of a new product. The upward move comes after three weeks of near constant selling pressure that resulted when the company disappointed Wall Street with its third-quarter loss on Jan. 29, said Joseph Arsenio, managing director of technology research at Hambrecht & Quist Inc. That selling chopped as much as 55% off the stock price. However, concerns are being eased as management is taking steps to get a better hold on its expenditures, he said. "There's a growing indication they are in the process of significantly reducing their cost structure," said Arsenio, who maintains a hold rating on the shares. Sonic Solutions stock leapt 43.8 cents Wednesday and then rose another 87.5 cents to $3.625 Thursday afternoon on Nasdaq volume of 271,700 shares, compared with an average daily turnover of about 31,200 shares. The shares are still well below the close of $4.438 on Jan. 29. For nearly two years, the maker of tools for video, audio and multimedia professionals made sizable investments into its core technology, DVD Creator, a tool that makes DVD disks, said Sonic Chief Financial Officer Clay Leighton. "We have completed the initial development of those tools," Leighton said. "The huge investment is now behind us." He added that the company is cutting back on costs related to outside contractors and consultants, and reducing related cash spending. The recent drop in the stock price sent the valuation on the shares "into a range that was as low as one times revenue," Leighton said, adding that such a number is very low for a technology company. On Thursday, the company unveiled its Sonic DVD Vobulator for Macintoch OS and Windows NT, which allows multimedia producers to create content for DVD-ROM and digital broadcast use. Leighton said the new products being introduced, in conjunction with an award received by the company's DVD Creator product, also could be helping shares. Analyst Hany Nada, of Piper Jaffray Inc., indicated that the stock was artificially off following the release of its financial results, and said Sonic's new product releases could be the cause of renewed enthusiasm for the shares. Still, Nada - who rates the shares at neutral - said he "needs to see some financial results before (he) gets excited." On Jan. 29, the Novato, Calif., company reported a loss of $1.4 million, or 18 cents a share, on revenue of $4.7 million for the third quarter ended Dec. 31. In the year-ago quarter, the company posted a loss of $927,000, or 12 cents a diluted share, on $4.5 million in revenue. -By Tara Siegel; 201-938-5176 Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.