Shares of newly public Persistence Software (Nasdaq: PRSW) were taking their lumps Monday after the company issued a third quarter profit warning. Persistence was down 36 percent, or 9 7/16 to 16 5/8.
Persistence (chart), an e-commerce software vendor, said a delay in finalizing a large contract will result in revenue between $2.5 million and $2.7 million. The results will be down sharply from the second quarter when the company reported sales of $4.2 million and a pro forma loss of $1.3 million, or 9 cents a share.
Wall Street was expecting a loss of 13 cents a share for the third quarter, according to Zack's.
Persistence went public June 25, pricing 3 million shares at $11 each.
"We view this revenue shortfall as an unfortunate timing issue and we are still in negotiations with the potential customer," said Christopher Keene, CEO, in a statement.
Persistence's plight is common for many newly-public companies. Many companies rely on a handful of customers for most of their revenue.
In a recent regulatory filing the company said sales to its top five customers accounted for 51 percent of total revenue for the six months ended June 30. "In the future, we expect to have relatively few large customers continue to account for a relatively large proportion of our revenues," the company said.
BancBoston Robertson Stephens, SoundView Financial and USB Piper Jaffray all maintain at least "buy" ratings on the stock. All three were underwriters for the Persistence IPO.