The Motley Fool: The Lunchtime News, 04/01/97

FOOL PLATE SPECIAL
An Investment Opinion by MF Raleigh

Technology Winner, Stock Loser

Database developer INFORMIX <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IFMX)") else Response.Write("(Nasdaq: IFMX)") end if %> plunged $4 13/16 to $10 5/16 this morning on a revenue and profit warning issued by the Menlo Park, California-based concern. Informix announced that revenues for the quarter will only be in the $130 million to $145 million range, well below the $204 million the company booked last year. The company blamed weakness in all geographic regions, including Europe, and the failure to close a number of large transactions "due to other reasons than competition." Informix will post a large operating loss as a result of the massive revenue shortfall.

Informix has had a horrible time since it hit a high of around $31 in September of 1996. The company reported a flat quarter in October on weak sales growth, and dropped in November because its Web development tools were not as robust as previously promised with a number of analysts cutting their estimates. It now appears that those reduced estimates of $0.84 EPS for the fiscal year will not be low enough, as the company will not even come close to the mean estimate of $0.13 EPS for this quarter. The sudden revenue contraction has worried investors who still have a fresh memory of Sybase's implosion two years ago, a crater from which the company has yet to crawl out.

Still a relatively small player in the database industry, Informix has been viewed for some time as a company whose technology was superior to that of competitors. In a statement released today, the company stated that it had "lost momentum" in its UNIX business because it was plugging its new object-rational technology too strongly and had failed to explain its price and performance benefits on the Windows NT platform to customers, another critical loss. Informix regularly tries to bash the brains out of companies with billions in revenues. Apparently, Informix itself is the one being bashed lately. Can Informix recover from this disastrous quarter? Although the company may have superior object-rational database tools, the technology has not moved there in any force yet. Before looking at the shares, investors should study the database industry at length to avoid throwing any money into a Sybase Jr.

UPS

Bar code data systems integrator PEAK TECHNOLOGIES GROUP <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PEAK)") else Response.Write("(Nasdaq: PEAK)") end if %> gained $1/2 to $11 after the company reported that it has received a buyout offer "from a company substantially larger than Peak at a premium to the current market price." That's a good thing, since the company just reported a substantial operating loss in its first quarter.

RATIONAL SOFTWARE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RATL)") else Response.Write("(Nasdaq: RATL)") end if %> bounded $1 3/8 higher to $22 after the software development tools company announced its $31 million cash acquisition of Performance Awareness Corp., a similar type of company.

SALOMON INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SB)") else Response.Write("(NYSE: SB)") end if %> gained $2 3/8 to $52 1/4 after Securities Data Co. reported strong results for securities underwriting in the first quarter. Merger and acquisition activity will also help the investment banking industry.

Energy company ZEIGLER COAL HOLDING CO. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZEI)") else Response.Write("(NYSE: ZEI)") end if %> gained $1 1/4 to $25 after the company named a new Chief Financial Officer (CFO).

DOWNS P> Semiconductor engineering software company QUICKTURN DESIGN SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QKTN)") else Response.Write("(Nasdaq: QKTN)") end if %> tumbled $6 15/16 to $9 1/16 after announcing expected Q1 revenues of $20 to $21 million, down up to 30% sequentially, as well as an expected loss per share of $0.10 to $0.13, because of a disruption in usual ordering patterns.

HEARTSTREAM INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HTST)") else Response.Write("(Nasdaq: HTST)") end if %> declined $3 1/16 to $7 9/16 after the heart defibrillator company said it expects to report a Q1 loss of $0.35 to $0.38 per share, in line with estimates. Cowen & Co. cut its rating on the company to "buy" from "strong buy."

FORE SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FORE)") else Response.Write("(Nasdaq: FORE)") end if %> opened sharply lower and was trading at $12 1/4, down from last night's close of $15, after the maker of ATM and fast ethernet networking switching systems said it expects to report Q4 EPS of $0.09 to $10, below estimates of $0.15, due to competition and a slower industry environment.

Customer service help-desk software firm APPLIX INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: APLX)") else Response.Write("(Nasdaq: APLX)") end if %> lost $1 5/8 to $4 3/4 after announcing it expects sales to decline by 27% sequentially, causing a loss for its first quarter.

U.S. DIAGNOSTIC INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USDL)") else Response.Write("(Nasdaq: USDL)") end if %> lost $1 1/4 to $6 7/8 after the medical imaging labs company said it will restate 1996 results to reflect a $20.6 million non-cash charge arising from acquisitions.

Animation house PIXAR INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PIXR)") else Response.Write("(Nasdaq: PIXR)") end if %> fell $1 5/8 to $16 1/4 after one of its underwriters, Cowen & Co., downgraded the company to "neutral" from "buy," due to concern over near-term operating financial performance.

PATRIOT AMERICAN HOSPITALITY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PAH)") else Response.Write("(NYSE: PAH)") end if %> lost $1 3/4 to $22 1/2 on rumors, propagated by the Dow Jones organization, that the company will take over WYNDHAM HOTEL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WYN)") else Response.Write("(NYSE: WYN)") end if %>.

PARAMETRIC TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PMTC)") else Response.Write("(Nasdaq: PMTC)") end if %> fell $1 5/8 to $43 1/2 after Goldman Sachs moved the shares from its "priority list" to its "recommended list." The company specializes in computer-aided design and computer-aided manufacturing software (CAD/CAM).

In-store marketing services company CATALINA MARKETING <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: POS)") else Response.Write("(NYSE: POS)") end if %> was clipped for a $10 loss to $29 after the company said it expects to miss the fourth quarter estimate of $0.36 due to weakness in "non-core" businesses.

CONFERENCE CALLS

CASCADE COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCC)") else Response.Write("(Nasdaq: CSCC)") end if %>
ASCEND COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASND)") else Response.Write("(Nasdaq: ASND)") end if %>
To discuss merger announcement
(800) 475-6701 (code: 336788)

SHIVA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SHVA)") else Response.Write("(Nasdaq: SHVA)") end if %>
Call regarding today's press announcements
(800) 458-7879 code 67437
Replay available until 5:00 PM EST on 4/1

ASTORIA FINANCIAL CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ASFC)") else Response.Write("(Nasdaq: ASFC)") end if %> and
THE GREATER NEW YORK SAVINGS BANK <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GRTR)") else Response.Write("(Nasdaq: GRTR)") end if %>
call regarding Astoria's acquisition
(800) 839-3308 -- replay available through 4/2

US DIAGNOSTIC INC.<% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USDL)") else Response.Write("(Nasdaq: USDL)") end if %>
Replay available after 3:00 PM EST through 4/8
(303) 267-1074

THIS WEEK'S CONFERENCE CALL SYNOPSES

SHIVA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SHVA)") else Response.Write("(Nasdaq: SHVA)") end if %> Q1 Pre-Announcement
PAYCHEX <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PAYX)") else Response.Write("(Nasdaq: PAYX)") end if %> Q3 Conference Call

FOOL PORTFOLIO STOCKS

FOOL PORTFOLIO               BORING PORTFOLIO
ATCT down $7/16 at $6        ATLS up $1/8 at $26 3/8
AOL up $1 3/8 at $43 7/8     BGP down $1/8 at $18 7/8
CHV down $5/8 at $69         CSL unch. at $29 1/4
COMS down $1/4 at $32 1/2    CSCO down $3/4 at $48 11/16
GM unch. at $55 3/8          GNT up $3/4 at $34 1/2
IOM down $1/8 at $16 1/8     ORCL down $5/16 at $38 1/4
KLAC down $1/8 at $36 3/8    OXHP down $1/2 at $58 1/8
LU up $1/2 at $53            PMSI  up $3/8 at $10 1/8
MMM up $7/8 at $85 1/2       TDW up $1/2 at $46 1/2
T down $1/8 at $35 1/8

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Randy Befumo (MF Templar), a Fool
Fool Plate Special

Dale Wettlaufer (MF Raleigh), another Fool
Ups & Downs

Brian Bauer (MF Hoops), and yet another Fool
Editing