Ceridian (CEN) expects to meet its $1.01 earnings per share estimate for 2000, but it sees $0.65-$0.70 EPS for 2001 because of a lower than expected revenue run rate. Salomon Smith Barney downgraded its investment rating on the shares to neutral from outperform.
Analyst Patrick Burton says the data processing firm guided expectations downward on a slower than expected ramp-up of order levels, fourth quarter installations in its U.S. payroll business, and anticipated lower interest rates. Burton says he previously downgraded the company from buy to outperform on concerns over operational risks. He notes that these risks are becoming reality. Burton downgraded the shares further to reflect Ceridian's "dismal" outlook.
The analyst cut his $1.16 EPS estimate to $0.87 and his $29 price target to $17.50.