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Technology Stocks : FORE Inc. -- Ignore unavailable to you. Want to Upgrade?

To: lin huan chen who wrote (10241)	1/20/1999 9:33:00 PM
From: lin huan chen	Respond to of 12559

Fore Systems Inc. Dow Jones Newswires -- January 20, 1999 Fore Systems Dn 14% On Disappointment Over 3Q Results By Joelle Tessler NEW YORK (Dow Jones)--Even though Fore Systems Inc.'s (FORE) fiscal third-quarter results met expectations, the company's stock is down nearly 15% on disappointment over its gross margins and inventory turns in the quarter, analysts said. Concerns that Fore Systems, a Warrendale, Pa., maker of computer-networking products, could "prerelease" disappointing third-quarter numbers emerged late in the period, but subsided in early January when the company did not do so. After that, one analyst said, some investors began to believe Fore might manage to blow away third-quarter projections since the company had entered the period with a sizable backlog of orders. Fore had issued a disappointing earnings outlook in the second quarter partly because many orders came in late in the period, leaving the company unable to fill them before the end of the period and pushing them into the third quarter. But Fore late Tuesday reported earnings for the fiscal third quarter, ended December, that were in line with the consensus estimate. The company posted earnings of 10 cents a share on $158.7 million in revenue for the quarter, flat with Fore's year-ago earnings of 10 cents a share on $122.1 million in revenue. Investors were particularly disappointed that gross margins for the third quarter came in at just above 53% after the company had led many to expect margins of about 55%. One analyst said margins fell short of expectations because about 5% of Fore's revenue for the quarter came from a government contract that was very "price competitive." This, he added, may indicate that the company cut prices just to get that business in order to meet estimates for the quarter. Another analyst said investors were also disappointed that Fore's inventory turns declined slightly. The company is targeting more than four inventory turns on an annualized basis, but he estimates that inventory turns are now in the mid-three range. Following Tuesday's earnings report, a number of analysts trimmed their earnings estimates on Fore. According to First Call Inc., the average estimate for the company's third quarter has slipped to 12 cents a share based on numbers from nine analysts, from 13 cents based on numbers from 16 analysts. Full-year consensus estimates have slipped to 45 cents a share for fiscal 1999 and to 69 cents for fiscal 2000, both based on numbers from nine analysts. The previous consensus estimates were 46 cents a share for fiscal 1999 and 72 cents for fiscal 2000, both based on numbers from 17 analysts. Fore earned 13 cents a share in the fourth quarter of last year, ended in March, and 35 cents for the full year. Fore's shares were recently down 3 1/8, or 14.8%, at 18 on Nasdaq volume of 6,770,200 compared with an average daily volume of 2,979,800. More about Fore Systems Inc.: From leading business publications From The Wall Street Journal Powered by Quote Agent® and News Agent® from IDD Information Services Copyright © 1999 Dow Jones & Company, Inc. All Rights Reserved.