www.whafh.com/cases/complaint/bmc2cmplt.htm -
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Published on: 8/1/2000
Last Visited: 9/6/2000
As reported by CIBC's analyst Melissa Eisenstat, in a report dated June 19, 2000, defendant Austin told investors that IT budgets for its customers were huge. Furthermore, Ms. Eisenstat noted that Austin told her that several $ 10 million deals had already closed.
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Ms. Eisenstat, because of the comments of defendant Austin and the guidance he provided, was comfortable with her estimate of earnings of $ .45 per share for the quarter ending June 30, 2000, only 11 days away.49. Defendant Austin's comments were false and misleading because by June 18, 2000 he most assuredly knew that there was a MIPS slowdown and that BMC was suffering from its effects.He also knew that CA's competitive posture was negatively and materially affecting BMC's business.50. As of July 2, 2000, BMC, was being followed by 24 analysts, 23 of whom gave BMC a Buy/Hold recommendation.According to Multex.com of that date, [ t ] he investment community has a very high level of confidence in the forecast of earnings for the company..51. Notwithstanding defendants' public assurances, in a manner reminiscent of their January announcement, on July 5, 2000, BMC shocked the market by revealing preliminary earnings well below analyst expectations.BMC stated that first quarter earnings were expected to be between 18 and 21 cents a share, significantly below company-guided analyst estimates of 46 cents a share.As reported by the Business Wire of that day, defendant Watson based the dismal earnings on a shortfall in mainframe license revenues -- a part of the business which defendant Austin claimed to be very strong and very profitable nearly two months earlier and Watson stated the loss of which would not adversely impact the Company.
BMC Software Inc. (Nasdaq : BMCS) today released preliminary financial results for the first quarter of fiscal year 2001.BMC Software said its preliminary estimate of total revenues for its first quarter ended June 30, 2000 would be in a range of $ 365 million to $ 375 million.