Platinum Corp. Predicts a Loss; Shares Fall 7% : Earnings: Irvine-based company expects downturn for latest quarter. Stock closes at 62.5 cents lower Wednesday.
Shares of Platinum Software Corp. fell more than 7% Wednesday after the company said it expects to post a loss for its latest quarter.
The accounting software company blamed higher costs and divestitures for the loss, which it estimated to be between $2.5 million and $2.9 million for the quarter ended Dec. 31.
In Nasdaq trading, Platinum’s stock closed at $8 a share, down 62.5 cents.
Carmelo J. Santoro, Platinum’s chief executive officer, said the loss was inevitable as the company restructures itself. Its founder and three other top officials resigned last year after the company revealed that it had overstated its revenue by $10 million for a 15-month period in 1993 and 1994.
Santoro said the company issued a statement ahead of its quarterly report to answer questions from investment analysts.
Since June, Santoro said, Platinum’s officers have been telling Wall Street analysts that “we couldn’t give them guidance, that there was too much gyration in the stock.”
“Last quarter we posted a profit, and some Wall Street guys went out and wrote this glorious story about the company,” Santoro said. “Now this quarter is rocky, and everybody revises their estimates, and we were just deluged with calls.”
Kenneth Burke, an analyst with the Hambrecht & Quist brokerage in San Francisco, said the company’s performance was below his and other analysts’ projections but that he is “positive in the longer term.”
“Anybody who wants to be interested in the stock has to be able to overlook a couple of quarters with no earnings or low earnings visibility,” Burke said.
Separately Wednesday, Platinum announced the resignation of H.L. (Sparky) Sparks, vice president of sales, to pursue his consulting business.
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Irvine-based Platinum Software reported Wednesday that it expects a second-quarter loss of $2.5 million to $2.9 million that could trigger a selloff of its stock. The stock closed at $8 on Wednesday after falling to $7.50 earlier in the day. Average monthly stock price and Wednesday’s close:
Jan. 18, 1995: $8.00
Source: Bloomberg Business News; Researched by VALERIE WILLIAMS-SANCHEZ / Los Angeles Times