Great Plains Software, Inc. (Nasdaq: GPSI) shed 40 percent Thursday after it warned earnings for the fourth quarter would be far below expectations due to lower-than-expected revenue.
Shares were down 16 1/4 to 24 1/8,well below their 52-week high of 83 1/2.
The stock also got downgraded by Chase H & Q from "buy" to "market perform."
As a result of the lower than expected revenues, as well as investments the company has made during the quarter, earnings per share are now expected to be between 5 and 10 cents a share, excluding the effect of amortization of acquired intangibles. That drops below management's internal expectations, and well below First Call's consensus of 6 analysts' estimates, which had predicted the company would bring in 32 cents a share.
Though showing strong annual and sequential growth, revenue will also be below internal expectations. Great Plains blamed a slower post-Y2K sales recovery and lower sales results as its partners broadened their business to include Great Plains eCRM and e-business solutions. New customer addition rates in the quarter, while higher sequentially, were also below internal expectations and pre-Y2K levels.
The company said it expects revenue for the quarter of between $58 million and $60 million, an increase of 45 to 50 percent over the fourth quarter of the prior fiscal year, and a 20 percent increase over the third quarter.
Great Plains also said it expects operating income for the fiscal year ended May 31, excluding the effect of amortization of acquired intangibles, of between $15 million and $17 million. Revenue for the year is expected to be between $193 million and $195 million, an increase of 43 percent over 1999.
Great Plains' top competitors include Oracle (Nasdaq: ORCL) and J.D. Edwards & Company (Nasdaq: JDEC) according to Hoover's Online.