Quarterdeck stock suffers
Despite profits that exceed analysts' expectations, the Internet utilities company sees its stock tumble 18 percent.
The stock fell as low as 5-1/16 and closed without any sign of relief at 5-1/8, down from its close of 6-1/4 yesterday. Quarterdeck announced its quarterly results yesterday, after the market's close.
The phenomenon may be one of profit-taking on the recent 13.6 percent rise in the stock , which closed up 3/4 yesterday over Wednesday's close, analysts said.
"It's pretty much a wash today," said Christopher Galvin, an anlayst at Hambrecht & Quist, who added, "The company performed good from a profitability standpoint, but its revenue growth was lackluster. It's basically in a turnaround case."
Quarterdeck yesterday reported net profits of $20,000, breaking even on a per-share basis, for the quarter ending December 31. That compared with profits of $2.8 million, or 8 cents a share, a year earlier.
The troubled Internet utilities maker reported a $54.8 million loss in the fourth quarter, which had marked a third consecutive quarter of losses.
Wall Street had expected the company to post a loss of 6 cents a share, according to First Call.
Revenues for the quarter were $24.4 million--nearly a 50 percent drop from a year ago--as the company saw a decline in some of its memory management and Internet communications products.
Quarterdeck executive King Lee attributed the slight profit to the company's restructuring plan and sales of its newly released CleanSweep 3.0 for Windows 95 and NT.
"We are pleased with the results of our turnaround efforts during the first fiscal quarter of 1997," Lee said in a statement. "We have made solid progress with our restructuring plan."
The company streamlined its operations and formed three business units--utilities, communications, and Internet solutions/direct marketing.
Quarterdeck is aiming for sustained profits this year. That may please shareholders, who filed a class-action lawsuit against the company last month, alleging that the company misled investors about its outlook. The stock had fallen to around 6 in December from 19-7/8 earlier in the year.
In addition, Quarterdeck this month brought in Curtis Hessler as its new chief executive. Hessler will take over the operations on February 3.