Tech Industry

Manugistics warns of steeper losses

The company, which makes business applications for manufacturers, says it will report a larger third-quarter loss, on less revenue, than analysts had expected.

Software maker Manugistics warned Wednesday that it will report a larger third-quarter loss, on less revenue, than analysts had expected.

The company, which makes business applications for manufacturers, said it expects to lose 35 cents to 37 cents per share on $61 million to $62 million in revenue for the quarter, which ended Nov. 30. Manugistics expects to report an adjusted loss, excluding restructuring and other charges, of 18 cents to 20 cents a share.

Analysts polled by First Call expected the company to post a loss of 14 cents before charges on revenue of slightly more than $70 million. In the same quarter a year ago, Manugistics posted a net loss of $45 million, or 66 cents per share, on revenue of $68.7 million. It posted an adjusted loss of $7.6 million, or 11 cents a share.

Software license revenues, a key indicator of business, declined to between $14 million and $14.5 million in the third quarter, from $22.1 million in the same period last year, the company said.

The news indicates that some business-software companies are still not out of the woods despite recent optimistic comments from software executives about seeing a recovery on the horizon after two years of market contraction.

"Our financial performance during the third quarter reflects the continuing difficult sales environment in all geographies. Although sales activity is up, it is not yet reflected in closure rates, as clients and prospects continue to postpone major capital investments in application software," said Greg Owens, Manugistics' chairman and chief executive officer, in a statement.

The company expects to post a restructuring charge of $7 million for the quarter as a result of cutting its staff by 12 percent and reducing remote office space.

In the fourth quarter, which ends Feb. 28, Manugistics expects to post higher revenue and a lower adjusted net loss as a result of a multiyear contract with the U.S. Defense Logistics Agency, which should bump up sales to $68 million or $69 million.

The company reports final third-quarter results Dec. 19.