Adams Harkness Cuts Parametric to 'Reduce'

Analyst Dennis Wassung cited the software maker's accounting uncertainities

Adams Harkness downgraded Parametric Technology (PMTC ) to reduce from market perform.

The maker of product development software sees a two cent to four cent first quarter loss. Analyst Dennis Wassung says the company cited an ongoing weak manufacturing environment for the shortfall.

In terms of its10-K extension, Parametric said it may have overstated maintenance revenue in prior periods by $20 million to $25 million, and thinks this revenue should have been deferred. Parametric recently installed a new automated accounting system, which management cited as the reason for maintenance revenue findings.

Wassung cut the breakeven first quarter earnings per share estimate to a three cent loss, and cut the two cent fiscal 2003 (Sept.) earnings per share to a four cent loss. He also cut the 12 cents fiscal 2004 earnings per share estimate to six cents earnings per share. Given the ongoing weak business conditions and accounting uncertainties, he downgraded the shares.