Markets & Finance

Prudential Lowers Portal Software to 'Underweight'

Prudential downgraded Portal Software (PRSF) to underweight from neutral.

Analyst Michael Turits says management cited contract delays and revenue recognition deferrals mainly at Tier 1 customers, as well as service execution issues. Although details are lacking, the third-quarter earnings miss appears to have been caused by a wide range of revenue recognition delays, deal push-outs, and failures to obtain customer acceptances on professional services deliverables.

He says these events undermine his confidence in management's ability to estimate the economic value of large new project-based billing deals. He widened the 15 cents fiscal 2004 (Jan.) loss per share estimate to a 41 cents loss per share.

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