Shares of Micros Systems Inc., a Beltsville-based computer systems supplier to the restaurant and lodging industry, plunged 52 percent yesterday as investors dumped the stock after the company said it expects significantly lower revenues in the quarter ending Sunday.
The loss of $25.75 a share wiped out more than $203 million of Micros' market value as the stock sank to a 52-week low of $25. The stock, which closed at $50.75 Friday, dipped as low as $23 during trading of more than 2.2 million of its 7.8 million shares.
"This is totally unexpected. It's a major overreaction by the market," said William Loomis, a Baltimore-based analyst with Ferris, Baker Watts Inc.
The stock plummeted almost as soon as the market opened and by 10 a.m. it was in a free fall.
Mr. Loomis said the stock was probably driven down by short-term investors who worried the stock had peaked Friday and pulled out.
The company's president, Anthony L. Giannopoulos, made the announcement about this quarter's lower-than-expected earnings Friday after the stock market closed.
Through a secretary, he declined to return a reporter's phone calls yesterday. He was said to be meeting with employees.
In a prepared statement released Friday, he said, "Although we are disappointed by these unexpected results, we will nonetheless continue our current strategies of continued worldwide revenue growth and ongoing cost reductions."
The company, which had profits of $11.6 million last year from sales of its computer systems, which track point-of-sale information for hotels and restaurants and casinos, blamed the bleak outlook on price cuts and lower-than-expected earnings from recent acquisitions.
The company did not provide specific earnings estimates, but Mr. Loomis said Ferris Baker Watts cut its estimate for the current quarter from 38 cents a share to 13 cents. For the year, the investment house projects earnings of $1.42 a share, down from $1.46 a share in 1995.
The company is experiencing profit pressures on several fronts, said Mr. Loomis. They include slowed growth in the sales of its computer hardware, price pressures from several key clients, poor performance from three distributors the company acquired, and its $28.8 million acquisition of Fidelio Software GmbH, a German company that supplies computer information systems to the hotel industry in 100 countries.
Mr. Loomis, who talked with company executives yesterday, said Mr. Giannopoulos was taking action to address the company's profit problems at the distributorships.
He was expected to make top management changes yesterday at the subsidiaries whose profits are expected to come short of projections.
Pressure from customers
The key difficulty the company ran into during this quarter was pressure from several of the company's largest customers to lower prices, said Mr. Loomis.
"I don't think the company expected that at all," he said.
Those customers include Burger King Corp., T. G. I. Friday's, and Hilton International Corp., which use Micros Systems' inventory tracking system and hand-held computers that allow food servers to relay orders from diners' tables to the kitchen.
Despite the lower than anticipated earnings, he said, the company is expected to remain profitable and is a good long-term investment.
"They have virtually no competition and the hospitality and casino industries are not experiencing any slow down," said Mr. Loomis.
"The bottom line is they are a good-quality growth company that has run into some short-term profit-margin problems," he said.
In September, Westinghouse Electric Corp. sold its 49 percent stake in Micros, or 3.85 million shares, for about $130 million. At the time, Westinghouse, which acquired its stake in 1986, said it realized a significant return on its investment.
Pub Date: 3/26/96