i2 to miss second-quarter targets

Business-to-business software maker i2 Technologies on Tuesday said it expects to miss revenue targets and post a wider-than-expected second-quarter loss because of a market climate that poses more challenges than anticipated.

Dallas-based i2 now expects to report in the range of $235 million to $240 million in revenue for the quarter ended June 30. The company intends to post a pro forma loss of 12 cents per share, excluding a special charge for bad debt expense of approximately $25 million to $27 million. Including that charge, the company will post a pro forma loss of 16 cents.

Analysts polled by First Call had expected i2 to make $282 million in revenue for the quarter and post a loss of 6 cents per share.

Shares of i2 dropped on the news of the warning. In early trading, the shares fell $1.28, losing about 7 percent, to $16.95. The company, which has been trading far from its 52-week high of $99.43, has been edging closer to its low of $12.56. The stock has plummeted 70 percent this year.

This is the latest stumbling block for the software maker, which has lost its footing in the overall economic downturn and shaky business-to-business software sector. Last Friday, rival Commerce One warned that its second-quarter revenue will sink below expectations.

In April, i2 said it would miss earnings expectations in its first quarter and lay off up to 10 percent of its work force, citing delayed customer

i2 Technologies Stock price from July 2000 to present.
Source: Prophet Finance

purchases. The company, whose core supply-chain automation software aims to help companies better manage their suppliers and inventory cycles, has since installed a new CEO and has been working to broaden its product footprint.

"Market conditions were much more difficult than we had anticipated this quarter--even more difficult than we experienced in the first quarter," CEO Greg Brady said in a statement. "These conditions prevented us from achieving what we believed were conservative estimates for the quarter."

The company said its pro forma net loss expected for the second quarter excludes a restructuring charge of approximately $33 million to $35 million, or 5 cents a share. Excluding adjustments such as amortization of intangible assets and equity investment gains and losses, i2 expects to report a net loss per share of approximately $2.10 to $2.12.

The company is slated to issue second-quarter results July 18.