Portal Software to come up short
The software maker says it will miss first-quarter estimates by a wide margin and will lay off staff, shut facilities and write off assets to cut costs.
The stock was down $3.10, or more than 33 percent, to $6.18, in midday trading on the Nasdaq.
Portal Software said it expects to see revenue of between $42 million and $44 million in the first quarter, which ended April 30. It expects to post a pro forma loss, excluding goodwill and acquisition charges, of between 19 cents and 21 cents per share.
That is a far cry from the penny-per-share profit analysts were expecting, according to First Call. First Call consensus for revenue was $76.7 million. Portal Software had already lowered expectations for the first quarter back in February.
Portal Software makes infrastructure, customer-management and billing software for broadband, wireless Internet and communications companies. Several of its customers have experienced their own problems, particularly in the communications sector.
"While we anticipated a slowdown in economic spending by technology and communications companies, the overall global downturn was greater than we had anticipated," Chief Executive John Little said in a news release.
But executives gave very little detailed information on Portal Software's figures during a conference call, saying they would have more information when the company formally reports first-quarter results May 17.
Executives did say they hope to cut expenses 20 percent to 25 percent through a variety of measures, including layoffs, although they would not specify how many there would be. In a news release, the company also said it would consolidate facilities and write off assets to cut costs.
The company anticipates taking a restructuring charge in the second quarter related to the cuts.
Chief Financial Officer Jack Acosta said the company has between $183 million and $185 million in cash. "Clearly we think we have sufficient cash on hand to weather this economic slowdown," he said.
The company topped estimates for its fourth quarter back in February, but warned investors then that "macroeconomic issues" could affect its results.
Acosta said then that he expected the majority of growth for the fiscal year coming in the second half. Executives would not discuss their order pipeline Monday, although Little did say the company signed some new customers in the last two months of the quarter.