Broderbund takes a beating
The educational software developer's stock falls by as much as 25.8 percent after its earnings estimates fall short.
Shares of Broderbund slipped as low as 22-5/8 during morning trading before closing the day at 23-1/8, down 7-3/8 from yesterday.
The company's shares plummeted after it announced yesterday that its second-quarter results would not meet Wall Street's estimates. That announcement was made after the market's close.
Broderbund expects to report net profits of 15 to 20 cents a share, excluding a one-time acquisition charge for Living Books.
Wall Street had been expecting the company to post earnings of 31 cents a share, according to First Call.
Revenues, meanwhile, are expected to fall between $41 million to $44 million for the quarter ending February 28.
Broderbund cited its price reductions as driving down gross margins and revenues.
"Although we were pleased with our increase in unit volume, which was up 30 percent according to PC Data for the last three months, post-holiday volumes were not adequate to offset reduced prices," said Joe Durrett, chief executive officer, in a statement. "We believe the improvement in our business is still moving ahead, but it will probably take a few months longer than previously anticipated."
Broderbund has been hurt by soft sales for its entertainment titles. The company also attributed its weakened financial performance to price cuts taken during the first quarter.
The company expects to report its quarterly results March 20.