update Shares in Macromedia plunged Thursday as analysts slashed
estimates and ratings for the company after its fourth-quarter report.
The company on Wednesday missed profit estimates and remained mum on
future expectations.
Shares closed down $5.98, or 22.5 percent, to $20.60.
Macromedia makes Web design and development software, including
multimedia-playback and graphics-development tools.
Macromedia fell far short of estimates in its fourth quarter Wednesday,
earning $8.4 million, or 16 cents a share, on sales of $89.1 million.
The company also announced that it laid off 200 employees in the
quarter. First Call consensus had been for a profit of 20 cents a share
in the quarter.
But worse than missing numbers was the company's refusal to say a word
about its outlook. That was the main beef of analysts who downgraded the
stock or lowered its rating Thursday. Some also pointed out that the
company is having a tough time integrating its recent acquisition of
development-tool maker Allaire.
The lack of guidance "spooks investors," said Jonathan Rosenzweig of
Salomon Smith Barney, who lowered his ratings for 2002 from $1.25 to 90
cents a share despite the fact that the company gave no guidance. The
analyst maintained his "outperform" rating but cautioned that
"expectations are likely to be broadly reduced."
Other analysts were less forgiving.
Tucker Anthony's Aaron Scott cut his rating on the stock to "market
perform" from "buy" and recommended a "hasty retreat for current
shareholders."
Investors who want to remain in the Web infrastructure universe would be
better served by investing in Adobe, he added.
Moors Cabot analyst Ed Bierdeman also reduced his rating--from "buy" to
"hold"--and while he remained optimistic about the company's long-term
prospects, said that in the near future he was "concerned by
deteriorating revenue growth and management's inability to produce
guidance."
Analysts also expressed concern about the company's merger with Allaire,
which had shopped itself around for almost a year before finally finding
a buyer in Macromedia. On a conference call, management was upbeat about
integration, but analysts were skeptical. This isn't the first time
analysts have expressed concern about the Allaire merger--most have been
pessimistic about the deal since it was first announced.
Macromedia "may be realizing that the purchase of Allaire was not such a
wise decision," and that the company may be "riddled with unanticipated
problems," Scott wrote.
With the exception of the integration of Allaire's product lines, Scott
noted that the companies have no "clear strategy."
The Allaire integration may even be the cause of Macromedia's inability
to give projections. "We believe management's lack of visibility is
exacerbated by the Allaire acquisition," wrote Thomas Weisel Partners
analyst R. Keith Gay, who lowered his estimates on Macromedia Thursday.
"Integrating Allaire would be a challenge in the best of times, much
less during one of the worst software-sales environments of recent
years," Gay added
There are two major products that come out of Berkeley: LSD and [Unix]
BSD. We don't believe this to be a coincidence.
Doug Brown
----- Original Message -----
From: "Dave Watts" <[EMAIL PROTECTED]>
To: "CF-Talk" <[EMAIL PROTECTED]>
Sent: Wednesday, January 30, 2002 4:57 PM
Subject: RE: Macromedia.com
> > I am glad you all have plenty of CF work in the US.
> > I live in Australia and if any of you have seen the long
> > thread "The Death of Cold Fusion" on the MM CF forums you
> > would know that there is virtually no work in Australia for
> > CF-ers. Go to www.seek.com.au and do a search. I live in
> > Perth which is admittedly a bit of a backwater, but even
> > in Sydney, a major city, there are no jobs. Perth is 2000
> > miles from Sydney and I think I have the last CF job in Perth.
> > ASP.net may be a pile of crap, but it and Java are the clear
> > winners over here. I will have to re-skill, but how will I
> > get experience in J2EE without having the infrastructure to
> > play with ? Sure, I can do Java/JSP already, but how do you
> > experiment with EJB ? I think CF is fantastic, but there are
> > no jobs and almost no-one is using it.
>
> Things are tough all over, though. Here's a quote from another list,
the DC
> ASP users group (aspug-dc):
>
> "Sent: Tuesday, January 29, 2002 11:36 PM
> To: aspug-dc
> Subject: [aspug-dc] Re: Microsoft Government .NET Developer's Users
Group
>
> You got work? Wish I could find some good training or development
work. If
> you have too much I'm sure there are others on this list looking for
more
> work too!"
>
> Just for kicks, I searched for ASP consulting jobs in Perth, and got
this:
>
> "Unfortunately your search query did not return any results."
>
> Dave Watts, CTO, Fig Leaf Software
> http://www.figleaf.com/
> voice: (202) 797-5496
> fax: (202) 797-5444
>
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