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Technology Stocks : J.D. Edwards debut! (JDEC) -- Ignore unavailable to you. Want to Upgrade?

To: Senor VS who wrote (171)	10/22/1998 10:51:00 AM
From: Nikos Tsivranidis	Read Replies (1) \| Respond to of 583

Article from the WSJ J.D. Edwards -2: Analysts Say Co. Targets Different Market By TOM LOCKE Dow Jones Newswires DENVER -- J.D. Edwards & Co. (JDEC) shares slid 12.7% Wednesday, following a 6.4% drop Tuesday, and analysts attributed the downturn to slower-growth projections from other enterprise software providers. Analysts said earnings releases from PeopleSoft Inc. (PSFT) and SAP AG (SAP) hurt J.D. Edwards shares because it also provides "enterprise software," which integrates processes such as human resources and accounting. But American Fronteer Financial Corp. investment strategist Hank Riehl said the other companies' slower-growth projections don't apply to J.D. Edwards. That's because it emphasizes a client base of mid-sized companies, a market not as saturated with new software as the Fortune-500 bailiwick of SAP and PeopleSoft, he said. J.D. Edwards spokesman John Sawyer declined comment on the company's recent stock price activity. In a third-quarter earnings press release issued after the market closed Tuesday, PeopleSoft projected that its revenue growth would slow in 1999, increasing by 25% to 35% next year compared with projected growth of 60% in 1998. PeopleSoft, whose share dropped 23% Wednesday, also cited lower forecasting confidence because of global economic difficulties, increased competition and Year 2000 challenges. Some firms are postponing enterprise-software spending because of Year 2000 problems, Riehl said. Besides the PeopleSoft announcement, analysts also cited the slower-growth projections of SAP in its earnings release before the market opened Tuesday. The German company said it expected growth to slow in the fourth quarter and "some moderation of demand due to year 2000 issues." According to Lehman Brothers analyst Brian Skiba, J.D. Edwards stock is "getting a sympathy vote from SAP and PeopleSoft. ... I think what's happened is the risk-reward profile has shifted for all these companies." Skiba pointed out that there is some concern among investors that J.D. Edwards may face increased competition in its middle-market segment as other providers turn there because of slower growth with upper-tier companies. J.D. Edwards revenue for the third quarter ending July 31 rose 47%, to $239.6 million, and its third-quarter earnings per diluted share rose 129%, to 16 cents. The stock price reached its 52-week high of 49 1/2 on Sept. 30. Its closing price of 26 1/4 on Wednesday may not be the short-term bottom, according to Skiba. He expects prices in the $20 to $25 range within the next week, he said. But Joseph Payne, an analyst with Hoak Breedlove Wesneski & Co., said J.D. Edwards shouldn't be lumped with PeopleSoft and SAP. "It's very difficult to differentiate one stock from a group, but this is one that should be differentiated," he said. "I think J.D. Edwards will have a very good year next year because of the difference in their product and revenue mix." J.D. Edwards shares closed Wednesday at 26 1/4, down 3 3/16 or 12.7%, on volume of 5,656,700 compared with average daily volume of 811,223. -By Tom Locke; 303-293-9294