Shares of software developer Complete Business Solutions Inc. (Nasdaq: CBSI) were halted Tuesday afternoon after falling 7 5/8, or 31 percent, to 16 5/8. Downgrades from two analysts preceded a profit warning from the company.
Complete Business Solutions officials said delays in overseas project execution on multiple contracts worth an estimated $11 million would cause the company to miss analysts' estimates in fiscal 1999.
Company officials now say it will earn between $1.05 a share to $1.15 a share in the fiscal year, slightly lower than the First Call consensus estimate of $1.18 a share. Total sales will be between $475 million to $495 million, also slightly below most analysts' estimates.
Ahead of the profit warning, SG Cowen Securities and First Union Capital Markets both downgraded the stock.
First Union's Moshe Katri cut Complete Business Solutions cut the stock from a "buy" to "neutral" while SG Cowen's Jeffrey Newman slashed it from a "strong buy" recommendation to "buy."
Katri cut the stock's 12-month price target from $30 a share to $50 a share and reduced his 1999 earnings estimate from $1.20 a share to $1 a share. He also slashed its 2000 earnings estimate from $1.60 a share to $1.45.
Complete Business Solutions' stock has struggled mightily in the past year, falling from a 52-week high of 38 in July to 14 1/16 in August.
Still, 10 of the 11 analysts following the stock rate it either a "buy" or "strong buy."
Last quarter, it earned $10.2 million, or 27 cents a share, on sales of $112 million.
First Call consensus expects it to earn 28 cents a share in its second quarter and $1.18 a share in the fiscal year>