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Deltek Systems falls on profit warning, downgrade

    Deltek Systems shares shed 1 15/16, or 22 percent, to a 52-week low of 6 7/8 Thursday after warning its second-quarter sales and earnings will fall woefully short of analysts' estimates.

    On Thursday, Legg Mason downgraded the software developer from a "buy" recommendation to a "market perform."

    Company officials said it will likely post a profit of between 5 cents to 9 cents a share, well below the First Call Corp. consensus estimate of 24 cents a share.

    It says it now expects sales in the vicinity of $23 million, slightly lower than the $23.8 million it recorded in the year-ago quarter.

    Deltek cited three primary reasons for the shortfall, including an overall slowdown in software sales and consulting revenues, increased software development and sales and marketing costs, and a significant increase in accounts receivable reserve, which is expected to be nonrecurring.

    "While there are many bright spots at Deltek, the second quarter results will be very disappointing," said CEO Ken deLaski in a prepared release. "The overall environment for back-office, client-server accounting software has not been conducive to revenue growth for the past several quarters and our results for the second quarter will continue to reflect this."

    Separately, Deltek said it will buy back up to 1.6 million shares of its common stock.

    Its shares peaked at 21 in March before swooning to a 52-week low of 7 5/8 earlier this month.

    All five analysts following the stock rate it either a "buy" or "strong buy."