Shares of CheckFree fell more than 45 percent today after the company announced yesterday that it expected revenues for the fiscal year 1999 to be much lower than expected, citing a delay in major banks marketing online banking to consumers.
CheckFree was trading at a new 52-week low, down 10.75 at 13. The stock has traded as high as 31.5 and has closed as low as 17.25 during the past 52-weeks.
The company reported that revenues will be about $20 million lower than was previously expected. CheckFree's new fiscal 1999 plans call for revenues of $245 to $250 million and earnings per share of 12 to 16 cents, compared with previous expectations of $265 to $270 million in revenues and earnings per share of 32 cents.
"New subscriber growth was lower than expected because of a factor we do not control: how quickly our bank clients promote electronic banking services to acquire new subscribers," chief operating officer Pete Sinisgalli said in a statement. "The fact is, more clients than we anticipated delayed promoting electronic bill payment services while they developed their Internet solutions."
While the company had anticipated subscriber growth of 8 percent in the fourth quarter, it was actually 6 percent. CheckFree now forecasts a subscriber growth of 4 percent for the first quarter, 5 percent for the second quarter, and 6 percent for the remainder of the fiscal year.
"Relative to the market's evolution, we are ahead of the game," CEO Pete Kight said in a statement. "We count among our clients 9 out of the top 10 financial institutions, 23 of the top 25, and 40 of the top 50."
Kight added that AT&T had chosen to use CheckFree. "With Microsoft pursuing the bill presentment market, I have been pleasantly surprised by how many long-term contracts with large billers we won in 1998," Kight said.