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Tech Industry

Verity surges on 2Q surprise, analyst comments

    Verity shares charged up $3.50, or 19 percent, to $22.06 Thursday after beating the Street estimate by 3 cents a share in its second quarter and raising its 2001 targets.

    In the quarter, Verity (Nasdaq: VRTY) posted a profit of $8.2 million, or 23 cents a share, on sales of $34.5 million.

    First Call Corp. consensus pegged it for a profit of 20 cents a share.

    The $34.5 million in sales represents a 107 percent improvement from the year-ago quarter when it pocketed $1.1 million, or 3 cents a share, on sales of $16.7 million.

    On Thursday, SG Cowen analyst Drew Brosseau reiterated his "strong buy" rating saying the company "has re-established strong growth and profitability that should continue with healthy market demand, new product flow and steady expansion in direct and indirect channel sales capacity."

    Brosseau said Verity's sales beat his estimate by $500,000 and that he maintains a 12-month price target of $60 a share.

    Banc of America Securities also reiterated its "strong buy" recommendation on the stock.

    Verity raised its fiscal 2001 earnings estimate to between 89 cents to 94 cents a share. It also boosted its sales estimate to between $144.4 million to $146.6 million, up 50 percent to 53 percent from the $96.1 million it recorded in fiscal 2000.

    Analysts were expecting a profit of 84 cents a share in the fiscal year.

    “Verity's second quarter's performance produced another quarter of excellent results,'' said CEO Gary Sbona in a prepared release. “Our business remains strong and on track, and our management metrics are performing to our operating plan.”

    Last quarter, Verity topped analysts’ estimates when it pocketed $7.2 million, or 20 cents a share, on sales of $31.3 million.

    Verity shares moved up to a 52-week high of $63.75 in March before falling to a low of $13.13 earlier this month.

    All five analysts following the stock maintain either a “buy” or “strong buy” recommendation.