J.D. Edwards & Company (Nasdaq: JDEC) tanked 25 percent Friday after warning it would lose between $20 million and $25 million for its second quarter. First Call was expecting a profit of 2 cents a share.
Shares were down 3 1/8 to 12 15/16, deepening the stocks' dip from a recent high of 48 5/16, the apex of the stock's flight started in February when J.D. Edwards surpassed first quarter expectations.
The company reported after Thursday's closing bell that it expects second quarter operating loss, excluding amortization of intangible assets, of $20 million to $25 million due to lower than anticipated margins on license fee revenue, and big spending in sales and marketing.
Revenue is expected in the range of $225 million to $235 million, flat compared to total revenue of $232 million in the second quarter of 1999. License fee revenue is projected to grow approximately 20 percent over the same period last year.
J.D. Edwards also said it expects a net profit after gains from the sale of equity investments, excluding amortization of intangible assets. The company said it remains financially very healthy with about $400 million in cash and investments.
President and CEO called this a "transitional quarter for J.D. Edwards and the enterprise software market," and said the company recorded healthy license fee growth and stronger growth than most of its competitors.
According to Hoover's profile, J.D. Edwards competes with Oracle (Nasdaq: ORCL), PeopleSoft (Nasdaq: PSFT), and SAP (NYSE: SAP).