FileNet Shares Fall 19% After Analyst Revises ’97 Estimate

COSTA MESA — FileNet Corp. shares fell 19% after an analyst reduced his 1997 earnings estimate for the software firm to $2 a share from $2.30.

The stock tumbled $5.375 to $23.375 on trading of 1.06 million shares, nearly triple the three-month daily average.

Most of the loss came about half an hour after Patrick Mason, an analyst with Volpe, Welty & Co., said he was reducing his earnings estimate for 1997 because of concerns about the company’s effort to boost its backlog. Mason, who maintained his “buy” rating for the computer imaging company’s stock, said he cut his earnings estimate after a phone call from FileNet’s chief financial officer, Mark St. Clare.

Christin Armacost, an analyst with Olde Discount Corp., said she discussed the backlog issue with St. Clare last week, but kept her 1997 earnings estimate at $2.50, the high end of estimates from Wall Street analysts.

Armacost said she believes the 1997 results will beat most expectations if the company is successful in building backlog this year, because its software products have a 90% profit margin.