Baltimore profit warning trims 30% off share value

Shares in Internet security firm Baltimore Technology lost more than 30 per cent of their value in London yesterday after the firm issued a profit warning.

The slide began a few hours before Mr Fran Rooney, chief executive of Baltimore, informed analysts that some sales were being delayed due to the "prevailing economic climate".

Rumours in the morning had already sent Baltimore shares into freefall before the company eventually issued a trading statement in the afternoon.

From a starting price of 166 pence in London, the shares dipped to a low of 99p sterling before regaining some ground to close at 104.5p. On the Nasdaq index, the shares shed $1.25, or 27.78 per cent, to close at $3.25.

The shares now stand at a 19month low.

At a briefing in Dublin, Mr Rooney, told analysts first-quarter revenue for 2001 would be just $25 million. This substantially revised previous estimates of around $30 million and is below the figure for the fourth quarter last year.

Analysts reacted by cutting their revenue forecast for fiscal 2001 by 20-25 per cent. Davy's is now forecasting full-year revenues of $110-$115 million.

Mr Barry Dixon, technology analyst with Davy's, said the market was disappointed by the cut in forecasts and said Baltimore's breakeven target in the fourth quarter was now "optimistic".

Merrill Lynch, which recently tipped Baltimore Technologies as a long-term buy, also cut its forecasts.

Software analyst Mr Peter McNally said the firm was reducing estimates by 25 per cent. Projections for profitability would also be pushed out, he added.

The statement by Baltimore disappointed many technology experts, who argued the security market would be an area of technology least affected by the economic slowdown.

Baltimore's stock price was also hit by speculation that large volumes of Baltimore stock may soon be sold on the market.

One analyst said 3i group and Goldman Sachs, the venture capitalist shareholders of Content Technologies, a company acquired by Baltimore last year in a stock deal, had indicated it would sell Baltimore stock in the next few weeks.

Under the terms of a lock-in arrangement, some 11.1 million shares held by 69 former Content shareholders - 2.2 per cent of the total - can be sold from April 25th.