Parametric warns of earnings falloff
Hurt by the high-tech slowdown, the product-manufacturing software company expects a significant shortfall in earnings and revenue for the third quarter.
The Needham, Mass.-based company said Thursday it now expects revenue for the quarter, which ended June 30, to be between $228 million and $230 million, as opposed to the $235 million it previously predicted.
Earnings per share will likely be between 2 cents and 4 cents, excluding amortization of intangibles and one-time charges. That's less than half the range of 6 cents to 10 cents Parametric predicted earlier.
"The slowdown in manufacturing, particularly in telecommunications and high-tech, was more pronounced this quarter than last," CEO C. Richard Harrison said in a release.
Parametric will report formal results for the quarter July 17.
The news sent the company's stock down 17 percent in early trading; it slid $2.11 to $10.26.
But analysts were not entirely discouraged.
"The key statement in the release is that 'as the third quarter closed, (Parametric) saw this weakness extend from the U.S. to Europe and Asia, primarily impacting the MCAD product line,'" wrote Merrill Lynch analyst Jay Vleeschhouwer.
That suggests that although the company "did not close as many 'pipeline' deals as expected, the 'base' business appears to have held up relatively well," he wrote.