Javelin Shares Lose 14%

Javelin Systems Inc. shares fell 14% Tuesday after First Security Van Kasper lowered its fourth-quarter revenue estimate, citing lower-than-expected shipments of computer terminals to McDonald’s Corp., analysts said.

First Security analyst Eric Wold said he was initially expecting a roll-out of 1,800 computer terminals to McDonald’s, but the company was able to ship only 200.

Wold said the shares’ decline is reflective of how many investors wrongly believe that Irvine-based Javelin Systems derives a majority of its sales from McDonald’s. In fact, he said, sales to McDonald’s account for only 11% to 12% of Javelin Systems’ total sales. “They believe [Javelin] is a McDonald’s story,” Wold said.

Javelin Systems shares fell $1.94 to $11.56 in Nasdaq trading.

Wold maintained his strong buy rating on the company and reiterated his 12-month price target of $22.50. He said shipments to McDonald’s dropped not because of problems on Javelin Systems’ end but because of difficulties at one of the fast-food giant’s distributors.

He maintained his earnings-per-share estimate for 1999 at 57 cents, and for the fourth quarter at 17 cents. The company earned 27 cents for 1998 and 13 cents for the year-ago fourth quarter.