Viasoft sees weak revenues, slashes jobs
The software company warns of a third-quarter earnings shortfall and plans a 20 percent reduction in its workforce.
Viasoft said it expects revenues of between $25 million to $25.8 million for the quarter. Lower-than-expected domestic sales of Y2K software licenses resulted in weaker-than-expected revenue, the Phoenix, Arizona-based company said in a statement.
The company said it expects third-quarter earnings to fall between 1 cent to 3 cents per share. Analysts surveyed by First Call projected the company to earn 8 cents. In the year-ago period, Viasoft posted a profit of 14 cents a share.
The company also said it will cut 100 jobs, which is expected to save the company $8.5 million to $9.5 million annually. As a result, Viasoft said it expects to take a charge in the fourth quarter of about $10 million, which includes severance costs and the write-down of certain long-lived assets and capitalized software.
Reorganization efforts will help the company move to a model more focused on e-business services and products, the company said.
Last October, the company cut about 50 jobs and consolidated some offices to refocus on non-Y2K-related business.
At that time, the company had said it saw increased competition for its OnMark 2000 product, a suite of software tools for PCs and servers that assist with Y2K technology problems. When its OnMark product first came out, it was one of the only products in the growing market, but the company said other competitors have since joined the market and, in turn, have slowed down the buying process.
At the close of the market yesterday, Viasoft shares dropped 14 percent, down 0.563 to 3.5.
Earnings results for the third quarter will be released on April 22.