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Data Dimensions drops on warning

Shares of the Y2K consulting firm plunge 25 percent in early trading after it warns that it expects its financial results to miss the mark.

Shares of Data Dimensions plunged as much as 25 percent in early trading after the Y2K consulting firm today warned that it expects its financial results for the fourth quarter to miss the mark due to Year 2000 budget pressures, delays in IT consulting agreements, and deferral of projects.

The company said its fourth quarter, ending December 31, will be below analysts' expectations, and did not announce any preliminary numbers for the quarter. However, Wall Street analysts' estimates for the quarter is 32 cents per share, according to First Call.

Data Dimensions noted that its fiscal year earnings will be between 69 and 74 cents per share excluding nonrecurring charges, or 65 to 70 cents per share including charges. The company said it posted a loss of 22 cents per share, including charges, in 1997. Analysts were expecting the company to post earning of 83 cents a share for the year, according to First Call.

"Certain clients have had to respond to financial conditions within their organizations by reducing IT spending," Gordon Gardiner, the company's chief financial officer, said in a statement. "Although it is difficult to predict such actions, it appears that at least some of these issues are confined to the fourth quarter."

Final results for the fourth quarter and full year will be announced January 28, 1999.

Data Dimensions' stock tumbled 25 percent, or 3.0625, to 9.1875. The stock has traded as high as 21.25 and low as 7.5 during the past 52 weeks.