The price of stock in Floating Point Systems dropped like a brick Tuesday as investors reacted to a disappointing earnings projection issued Monday. The stock fell $12.37 1/2 to close at $21.12 1/2; more than 1.3 million shares changed hands, making Floating Point the ninth most active issue on the Big Board.
In a statement issued after the market closed Monday, Floating Point said sales and profits would be lower than it anticipated for the third quarter ending July 31 and for the fiscal year.
Analysts said that without strong second-half sales, full-year profits would be about half what investors had been expecting. "It's very simple. They missed their revenue and the earnings disappeared," said David Wu, an analyst at S. G. Warburg, Rowe & Pitman, Akroyd in San Francisco.
Jeffry Canin, an analyst with Hambrecht & Quist in San Francisco, said that even though the softness in the domestic computer market is well known, investors were "fairly shocked" by the Floating Point announcement because as late as a month ago in a meeting with security analysts, company officials gave very upbeat projections of second-half sales.
