According to a study released today by Weiss Ratings, a firm that rates companies on their financial stability, year 2000 budgets at many large corporations increased dramatically in the first quarter of this year because managers may have underestimated the extent of millennium-related problems.
Weiss also reported that despite the increased dollars spent on year 2000 among the 23 Fortune 1,000 firms it gauges, only a handful even rate average when it comes to actual remediation progress.
And technology companies aren't among them. America Online's year 2000 budget grew 150% in the first three months of 1999 but still only received "low" as a rating. Both Computer Sciences Corp. and USWest efforts were classified as below average. For USWest this is actually a downgrade.
Three firms, including Computer Associates, did not provide sufficient data for the rating firm to make an accurate assessment--a problem, said Martin Weiss, chairman of Weiss Ratings, that could hurt investor relations.
"Investors can usually absorb just about any bad news on Y2K, provided it's reported promptly and in small doses," Weiss said in a statement. "It's the sudden surprises, typically the result of inadequate or late disclosure, that have the potential to cause the most damage to investor sentiment."
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