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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: John F. who wrote (2440)	10/3/1998 12:48:00 AM
From: John F.	Read Replies (1) \| Respond to of 4509

Pair of downgrades hits PeopleSoft Analysts see growth slowing at software company By Brenon Daly, CBS MarketWatch Last Update: 2:04 PM ET Oct 2, 1998 NEW YORK (CBS.MW) -- Of all the people screaming as PeopleSoft shares dropped 25 percent on Friday to a new low for the year, the yelps of the company's chief executive could probably be heard above all. CEO Dave Duffield owns about 52.5 million shares -- 23 percent of outstanding stock -- in the company, according to the Carson Group, which keeps track of large stock holdings. That means the amiable Duffield -- who started his career at IBM and co-founded PeopleSoft (PSFT) 11 years ago -- lost a cool $430 million overnight. The precipitous decline of PeopleSoft's stock, which caused the company to lose about $2 billion of its market cap Friday, stems from downgrades by a pair of investment banks concerned over slowing growth at the maker of business automation software. The more vehement of the ratings cuts came from Morgan Stanley Dean Witter analyst Chuck Phillips, who cut his outlook all the way to "neutral" from "strong buy." Phillips said he took that step because of concerns that businesses are delaying purchases of PeopleSoft applications as they spend money to fix the pending year 2000 problem. (That glitch, which may cost a total of hundreds of billions of dollars to fix, stems from the fact that many computers recognize only the last two digits of a year and thus could misread 2000 as 1900, meaning that they may break down when the new millennium arrives.) Additionally, Phillips said larger rival SAP "is going right after" PeopleSoft's core market. The German giant (SAP) has slashed prices for its software, threatening to undercut PeopleSoft, he added. SAP has about three times the share of PeopleSoft in the so-called enterprise resource planning market, which helps businesses automate basic functions. Goldman Sachs analyst Rick Sherlund took PeopleSoft off the investment bank's "recommend list," saying sales of the company's software will slow in 1999 to about half of last year's rate. Sherlund said the global slowdown may ground PeopleSoft and other high-flying business software makers. (See full story.) Last month, PeopleSoft held an unprecedented conference call to discuss its outlook. It reiterated its goal to increase sales by 60 to 65 percent each quarter, while keeping operating margin between 18 and 20 percent. Investors didn't care too much about that on Friday, sending shares down 8 3/16 to 24 5/16. Trading was more than 10 times heavier than average. Brenon Daly is a reporter for CBS MarketWatch. cbs.marketwatch.com

To: John F. who wrote (2440)	10/3/1998 2:15:00 PM
From: Raptor	Respond to of 4509

John ... I'd sure like to hear how many times SAP is actually beating PSFT for an HRMS contract - assuming prospective client not already a SAP client for other systems. They just do not have a good business product yet for all of North America. I think it is immature and they have had problems getting it done - particularly for Canada. I haven't seen it lately, but I bet it doesn't hold up against PSFT's product for richness and legislative compliance. Then again, they may have made great strides.