Platinum Software Stock Dives 37.6%
Platinum Software Corp. shares tumbled 37.6% on Friday in heavy trading, apparently over investor concerns that the Irvine company’s earnings may fall short of analysts’ estimates in the fiscal first quarter.
The percentage loss was the fifth-biggest Friday in U.S. markets. Early in the trading session, the stock hit a 52-week low of $7.38 before rallying a bit to close at $8, down $4.81 for the day. Volume totaled 7.85 million shares, compared with the daily average of 472,723 shares over the last three months.
Platinum’s shares have fallen 49% this week.
“There’s an impression out there in the market that the company has been sending out negative vibes that they’re going to miss the quarter [estimate],” said Robert Kugel, a First Albany Corp. analyst who has a “buy” rating on the stock.
The drop in the share price stems from “panic selling,” said Kugel, who added that he doesn’t believe the concerns are justified.
Analysts said they expect the company to earn 16 cents a share for the three months ending Sept. 30. A year ago, it posted net income of $1 million, or 4 cents a share, on $17 million in revenue a year earlier.
Analyst Alex Kotlyar said the company is coming off a strong fiscal year “that drained some of the strengths out of the September quarter.” The sales force exceeded quotas in the last quarter, and now has to rebuild its sales pipeline, said Kotlyar, of Donaldson Lufkin & Jenrette.
Company spokesman Guy Hicks said he has no idea what caused the stock to drop.
“We have no explanation for what happened in the market today,” he said. “I wish I knew where those rumors and negative vibes are coming from because, as far as I know, they’re not coming from here.”
Analyst James M. Pickrel said company officials made comments at a recent investor conference in New York regarding the current quarter, saying “they still had business to close,” which caused some concern among investors. But Pickrel said he does not think the concerns are warranted.
“To me, it’s just another indication that the markets are nervous and volatile generally,” he said.
