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Computervision expects loss

The software company's operating losses will be substantially larger than expected for its first quarter.

2 min read
Computervision (CVN) announced today that its operating losses will be substantially larger than expected for its first quarter because of a $20 million shortfall in software licensing revenue.

The company, which specializes in computer-aided design software, saw its stock plunge as much as 2-1/8 in early trading from yesterday's close of 5-1/4. The stock has been dropping since January when it traded just above 9.

Computervision said it did not close 10 to 15 orders before the end of the quarter ending March 31. The $20 million shortage of sales will pull revenues down to around $40 million, says Kathryn Cadigan, a company spokeswoman. It had been anticipating revenues of about $60 million.

The company said negotiations for the orders are still in progress and have not been lost to competition, but it's not sure when the deals will close.

"We need to make sure that the main reason these deals didn't close is timing. We do have an internal forecasting problem, but we don't see any fundamental problems with our strategy or sales process," Cadigan said.

The company has not yet determined how much revenue shortfall will impact net income for the quarter, but Cadigan noted, "This will significantly increase the bottom-line loss that we expect."

Before the announcement, Wall Street analysts were expecting a loss of 8 cents a share, according to First Call.

Last year, the firm reported first-quarter revenues of $113.2 million and a net income of $8.2 million. And in the previous quarter, the company reported a loss of 9 cents a share.

"While we are confident about the prospects for our business, it is clear that we pursue large contracts with long sales cycles and therefore have difficulty in predicting our results on a quarter-to-quarter basis," company president and CEO Kathleen A. Cote said in a statement.

Computervision will report final results for the first quarter on April 24.

The company recently introduced its EPD.Connect, part of its family of Electronic Product Definition products that allow users to create, manage, share, and reuse electronic product information.