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To: Jay Lyons who wrote (5537)	1/6/1999 2:04:00 PM
From: AlienTech	Respond to of 43080

=Network Assoc Stk -3: Charges Stem From 2 Acquisitions Network Associates said Wednesday its preliminary fourth-quarter earnings rose 62% from a year ago to 47 cents a share, beating the 46-cent First Call consensus estimate based on 20 analysts' predictions. The $220 million in charges subject to SEC review stem mainly from the company's acquisitions last year of CyberMedia Inc. for about $130 million and Magic Solutions for about $110 million, Larson said. Analysts were mixed in their views of the significance of the SEC review. BancBoston Robertson Stephens' Powers believes any cut in earnings resulting from a write-off reduction will be less than the company's worst-case scenario of a quarterly reduction of 2 cents to 3 cents a share for five to seven years. Powers called the SEC review a "nonevent" that the company should be able to counter through improved efficiencies, and he is maintaining his strong buy rating. Jefferies & Co. analyst Bruce D. Smith reiterated his buy rating for Wednesday despite the SEC news, saying investors will focus on earnings excluding amortization costs going forward. He raised his 12- to 18-month price target to $100. But Adams Harkness analyst Kevin Wagner said the SEC scrutiny of Network Associates was one of the factors that contributed to the Adams Harkness rating downgrade Tuesday to market performer from accumulate. Wagner said a reduction in in-process R&D writeoffs could exceed 2 cents to 3 cents a share, and it will be difficult for the company to make up the loss partly due to increased competition. "Our point was clearly Network Associates has gone on acquisition binge," increasing its exposure to an SEC crackdown on in-process R&D writeoffs, Wagner said. - Peter Loftus; 201-938-5099. (END) DOW JONES NEWS 01-06-99 01:33 PM