Another high tech company is suffering in the wake of the tough economic climate. Macromedia — the folks behind such cross platform applications and technologies as Flash, FreeHand, and Dreamweaver — saw their stocks plummet 30 percent yesterday after the company lowered expectations for its fiscal third quarter the day before.
Macromedia said it “expects weakness in the economic environment to continue,” and therefore it will not return to profitability by the end of its fiscal year — March 2002, as the company originally projected, according to a
report. Analysts quoted in the report expect the stock to trade around the $20 level.
Macromedia is now projecting the current quarter’s software revenue to be between US$70 million and $75 million. Jay Vleeschhouwer, analyst at Merrill Lynch, told CBS MarketWatch that he had been expecting a figure of almost $82 million and “assumes” that Macromedia returns to profitability in the June 2002 quarter. On the other hand, Vinay Shah, a Morgan Stanley software analyst, doesn’t expect Macromedia to turn a profit until fiscal 2004.
Analysts polled by Thomson Financial/First Call had been anticipating a per-share loss of 6 cents for the quarter, according to CBS MarketWatch. Macromedia turned a 36-cent per-share profit in the year-ago period.
“While our short-term results continue to be affected, we are confident in our products and our long term strategy for growth,” Rob Burgess, Macromedia’s chairman and chief executive, said in a statement on Wednesday.