Credit Suisse First Boston downgraded BEA Systems (BEAS) to buy from strong buy.
Analyst Marie Kluth says the company expects license revenue to fall between $125 million to $127 million vs. her $168 million estimate, which implies that license revenue accounts for the majority of about a $40 million shortfall from original guided levels. She notes management attributed the weakness to the slowdown in the wake of September 11. Kluth cut her $0.10 Q3 EPS estimate to $0.05, cut the $262 million sales estimate to $217 million; trimmed the $0.39 fiscal 2002 (Jan) EPS estimate to $0.29, and lowered the $0.53 fiscal 2003 estimate to $0.36. Kluth also cut the $29 target to $16. Although the downgrade is based on increased near-term risks, she continues to believe in BEA's long-term prospects.