Seer Technology’s announcement that it expects to report a loss for the current quarter caused a wholesale sell-off, as Wall St lost confidence in the company’s future earnings potential. For its first quarter ended Dec 31 1995, the Cary, North Carolina- based software company said it expects to report a net loss of approximately $5.5m, or $0.42 per share, and revenues of between $21.5m and $22m. In the 1994 quarter, it realized profits of 8 cents a share and revenues of $26.5m. The company attributed its expected revenue shortfall to several large contracts which did not close by the end of the quarter as expected. It also noted that its results depend on a small number of relatively large contracts. While Seer said it believes these sales will close, it could not offer investors any assurance as to whether or when they will close. The nature of the contracts in question was not disclosed. The report drove the company’s share price down 41.9%. The stocks closed Thursday at 18.75, opened Friday at 6.25. After hitting a low of 4 7/8, it ended the day right where it started, at 6.25. Standard & Poors analyst Mark Basham said the sell-off was a severe over-reaction to news that some of its large orders did not materialize. But, he nonetheless expressed a lack of confidence in the company’s 1996 earnings potential. While recommending that investors hold the stock for the short-term bounce he expects over the next few days, Basham does not expect any substantial rebound until 1997. Basham was not alone. Merril Lynch and Hambrecht & Quist both cut their ratings, recommending that investors hold the stock. Basham added that the company’s effort to broaden its product line with new network technology may not be going as smoothly as it could. President and Chief Executive Officer Gene Bedell said Seer is making a transition from selling large contracts to mainframe-based IBM accounts to selling a broader array of products, including server, Internet and reverse engineering products. As we reorient our sales and services efforts to address these significantly broader relationships and markets, delays, retraining and product introduction efforts may add to revenue volatility in the near term, he said. The company, which began operation in 1990, produces software products and services to manage large scale information systems. It will release final results on January 30, 1996, after the close of trading.
