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RESEARCH ALERT-Research Capital upgrades Cryptologic
April 30, 2002 02:42 PM ET
(All figures U.S. dollars, unless noted)
TORONTO, April 30 (Reuters) - Research Capital Corp. said on Tuesday it was upgrading Cryptologic Inc. CRY.TO CRYP.O to "buy" from "speculative buy" as analysts looked past problems with credit card transactions and applauded an improving outlook for the maker of Internet gambling software.
The company reported lower earnings and revenues on Tuesday as many U.S.-based banks limited the use of their credit cards for Internet gambling transactions.
For the quarter ended March 31, net income was $2.2 million, or 16 cents a share, down from $5.2 million, or 34 cents per share, in the year ago period.
Revenue fell to $8.7 million, from $10.9 million. The company projected revenue for the second quarter would be in a range of $9.5 million to $10.5 million.
In a research note, analyst Scott Preston said that new European licensing deals should help offset credit card losses.
"We remain concerned with credit card problems; however, Cryptologic's focus on increasing it European and international exposure, as well as extensive work on the addition of new payment options, should greatly mitigate this risk," Preston wrote.
Cryptologic shares were up 91 Canadian cents at C$20.66, at mid-afternoon on the Toronto Stock Exchange. The shares are down 26.5 percent in 2002. On Nasdaq, Cryptologic was up 31 cents at $13.04.
The stock has endured a roller-coaster ride since last August, as many U.S. credit card companies have refused to process online gambling transactions.
While online gambling is illegal in Canada, Canadians can use gambling sites whose servers are located out of the country.
April 30, 2002 02:42 PM ET
(All figures U.S. dollars, unless noted)
TORONTO, April 30 (Reuters) - Research Capital Corp. said on Tuesday it was upgrading Cryptologic Inc. CRY.TO CRYP.O to "buy" from "speculative buy" as analysts looked past problems with credit card transactions and applauded an improving outlook for the maker of Internet gambling software.
The company reported lower earnings and revenues on Tuesday as many U.S.-based banks limited the use of their credit cards for Internet gambling transactions.
For the quarter ended March 31, net income was $2.2 million, or 16 cents a share, down from $5.2 million, or 34 cents per share, in the year ago period.
Revenue fell to $8.7 million, from $10.9 million. The company projected revenue for the second quarter would be in a range of $9.5 million to $10.5 million.
In a research note, analyst Scott Preston said that new European licensing deals should help offset credit card losses.
"We remain concerned with credit card problems; however, Cryptologic's focus on increasing it European and international exposure, as well as extensive work on the addition of new payment options, should greatly mitigate this risk," Preston wrote.
Cryptologic shares were up 91 Canadian cents at C$20.66, at mid-afternoon on the Toronto Stock Exchange. The shares are down 26.5 percent in 2002. On Nasdaq, Cryptologic was up 31 cents at $13.04.
The stock has endured a roller-coaster ride since last August, as many U.S. credit card companies have refused to process online gambling transactions.
While online gambling is illegal in Canada, Canadians can use gambling sites whose servers are located out of the country.
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