J.D. Edwards reported lower-than-expected first-quarter earnings due to an overall slowdown in business software sales.
The Denver-based business firm, which makes enterprise resource planning (ERP) software to manage accounting, human resources, and manufacturing, said revenues increased 25 percent to $222.9 million for the quarter-ended January 31, 1999, compared to $178.3 million one year ago.
The company posted profits of $4.3 million, or 4 cents per share, compared to $6.4 million, or 6 cents a share, a year ago.
As previously reported, the company issued a warning of lower than expected earnings on February 11. Before the warning was issued, Wall Street analysts were expecting earnings of 9 cents per share, according to a First Call consensus. J.D. Edwards is the latest vendor to be hit by an industry-wide slowdown in ERP software sales.
The company's license fee revenues grew slightly, to $69.6 million from $68 million in the first quarter of 1998, while the firm's services revenues fared better--increasing 39 percent to $153.3 million.
Shares of the company's stock were trading at $14.93 a share this morning, tumbling this month from a 52-week high of $49.50.
Company executives said a host of internal and external factors have hurt profitability, including the crisis in Asia and slower-than-expected license fee growth as corporations focus on their Year 2000 systems fixes.
The firm is also adjusting to a sales force restructuring and a new vertical business model it shifted to last November when the company was split into three divisions: industrial, consumer products and goods, and general services, marketing, and development.
To build up offerings in the industrial division, J.D. Edwards this month made its first acquisition since going public in 1997, buying Premisys in a $12 million deal. Premisys makes engineering design software companies use for "made-to-order" manufacturing.