The Y2K bug hasn’t directly hit Axent Technologies (Nasdaq: AXNT), but it’s indirectly been the company’s worst nightmare.
Axent, which provides information security services for online businesses, announced Monday that it expects a loss of 5 to 10 cents (US) a share in the first quarter of 1999, before recurring charges for acquisitions. Last week, Axent bought British company PassGo Technologies for about $50 million (US$) in stock.
Wall Street analysts surveyed by First Call expected Axent to earn 18 cents a share in the first quarter. In contrast, last year, the company earned 12 cents a share in the first quarter.
The losses are largely tied to year 2000 issues. Apparently, many of Axent’s clients are delaying orders as they spend money to fix Y2K-related problems.
“Like other software companies, we have experienced unanticipated delays with a number of enterprise orders for a variety of reasons including the shifting of customer budgets and spending to year 2000 and other issues,” said John Becker, CEO and chairman of the board of Axent.
Other companies that have reported similar slowdowns include Oracle and Peoplesoft.
Axent’s Strategy Stays the Same
But Axent isn’t panicking. Becker says his company will keep on moving forward without altering its business strategy.
“We will not let the results of this quarter diminish our conviction that Axent’s long-term strategy is correct,” Becker said. “We will continue to deliver the breadth of products and services necessary for our customers to conduct e-business securely.”
Becker also indicated that Axent will be increasing investment in product development and marketing to better position the company for the future.
Stock Gets Pummeled
Wall Street, however, is battering the stock. Shares of Axent were down nearly 60 percent, falling 11-15/16 to 8-1/16 on Monday.
Also on Monday, the stock was downgraded by both Merrill Lynch and ING Barings. The stock has been downgraded by NB Montgomery today.
Axent’s complete first-quarter results will be available on April 29.