Bank technology stocks mainly rose last week, as first-quarter earnings reports continued to point to the sector's upbeat prospects for 1995.
As the Dow Jones industrial average continued to rise to record levels, financial technology firms reported quarterly earnings that were mostly in line with analysts' estimates. Investors generally took this news positively, as the first quarter has historically been the slowest sales period for computer systems firms.
Banking software and systems integrator Broadway & Seymour Inc. saw its stock price rebound by $2.625 a share Thursday, after its first-quarter earnings release.
The Charlotte, N.C.-based firm reported higher revenues but a lower net profit by comparison with 1994. The earnings decline was mainly due to expenses related to product development in its trust and image processing businesses, officials said.
The company told investors in March that it expects to spend $3 million this year to develop a check-image processing system and to offer its trust software through service bureaus.
Broadway & Seymour earned $668,000 in the first quarter, or 8 cents per share, compared with $1.3 million in the year-earlier period. Revenues hit $29.5 million for the quarter. Wall Street analysts had been predicting earnings per share of 11 cents, according to data from First Call Corp.
But despite the earnings decline, Broadway & Seymour executives said they expect to finish the year in a strong position, said Stephen Shook, an analyst at Interstate/Johnson Lane in Charlotte.
Mr. Shook said Broadway & Seymour already has a "verbal order" for its forthcoming check-imaging software, called VisualImpact. The system "should have a modest impact on earnings in (the) second half of this year," he said.
Broadway & Seymour's systems integration business is picking up steam, Mr. Shook added. Executives told him that the "pipeline" of potential new systems integration business has risen from $50 million at March 31, 1994, to more than $100 million today.
Broadway & Seymour's common stock closed at $18.50 a share, up $2.50 for the week.
Interlinq Software Corp., a mortgage system developer, last week reported a net loss of $647,000 for its third fiscal quarter, ended March 31. The Kirkland, Wash.-based company had earned $898,000, or 14 cents per share, in the same period last year. Net revenues for the quarter totaled $2.4 million, a decline of 52% from the third quarter of fiscal 1994.
"We are disappointed at the slow recovery in the mortgage lending industry," said Stephen Yount, Interlinq's chief financial officer and interim president. "Our customers and prospects are staying in a holding pattern as they weather this cycle, and as a result, our revenues continue to be negatively affected."