Two negative research notes from Wall Street analysts pulled the rug from under Netscape Communications Corp ‘s share price yesterday, as it fell $10.875, or 18.5% to close at $47.875, after very heavy trading of 14.07m of its Nasdaq-traded shares. Deutsche Morgan Grenfell Inc’s William Gurley said he expects Netscape’s fourth quarter numbers, due any day now to be in line or slightly higher than current Street expectations, which he put at $115m revenues and earnings per share of $0.11. The current First Call average is $0.10 per share. The reason for this apparently good news being bad is that investors have become accustomed to pleasant surprises from the Mountain View, California company. Gurley also said an emerging negative trend in the enterprise software industry could hurt Netscape. Gurley said Tuesday’s closing price fully valued the stock; it closed at $58.75, just short of his target of $60 per share. Therefore there is a lower chance of upside surprises in the quarters to come. The note added that the picture for the first quarter is somewhat cloudy in light of a lengthening sales cycle, a new pricing model and a major product transition. Separately, Wessels, Arnold & Henderson LLC analyst Stephen Sigmund said he believed Netscape’s December quarter business would be more back- end weighted than before.
รก
