PurchasePro warning overshadows new CFO
The announcement of a new chief finance officer doesn't offset an ominous 11th-hour profit warning.
The appointment of a new CFO couldn't do much for PurchasePro shares after an 11th-hour profit warning quashed high hopes for the first quarter and sent the stock reeling.
Shares were off $1.97, or almost 32 percent, to $4.25 in late morning trading Wednesday, cutting last week's rise almost in half. PurchasePro, which reports earnings after the closing bell, helps businesses sell goods and services online over buying-and-selling communities, or e-marketplaces.
Expectations that the Las Vegas-based company would fare well in its first-quarter report had PurchasePro shares up 49 percent over the past week.
The company said Wednesday it will fall short of estimates in the first quarter. PurchasePro said it expects "results to be below consensus estimates, primarily due to the deferred recognition of certain license revenue."
The company declined to give further details pending its earnings release. First Call's current consensus for the company predicts earnings of 8 cents a share and revenue of $41 million. Analysts had expected the company to top estimates. Lehman Brothers analyst Patrick Walravens had said in a Wednesday morning research note that he was anticipating $42 million in revenue and earnings of 10 cents per share.
Walravens also said he expected the company to report about $10 million in operating income.
The warning overshadowed the company's long-overdue appointment of a new chief financial officer. After Tuesday's closing bell, the company hired Richard Clemmer, formerly CFO of Quantum.
"Clemmer's experience as CFO of a multi-billion technology company will be invaluable for PurchasePro," Walravens wrote in a report.
The profit warning is just the latest chapter in the PurchasePro saga.
In February, Barron's magazine trashed the stock and accused the company of lacking a CFO. Though the company had an acting CFO, James P. Clough, it has been public about its search for a more experienced candidate.
PurchasePro countered by topping estimates for its fourth quarter and followed up by boosting its first-quarter outlook and expanding a partnership with AOL Time Warner. PurchasePro reported earnings of $7.6 million, or 11 cents a share, on sales of $33.6 million in the fourth quarter.