Manugistics Warns Of Wide Revenue Miss, Loss

The shares were at $5.72 in early afternoon trading on the Nasdaq Stock Market, off $2.22, or 28 percent, on heavy volume. The stock has fallen 73 percent since April 1, erasing more than $1 billion in shareholder wealth.

The Rockville, Md., company said software license revenue for the period ended May 31 would be $24 million to $25 million, down 47 percent from the previous year. Analysts had expected license revenue of $36 million to $40 million.

The drop in lucrative software deals coupled with an increase in expenses, partly due to a move into a new headquarters, will result in a loss far wider than expected. The first-quarter loss will now be 18 cents a share, compared with earlier goals of a 2-cent loss, analysts said.

Greg Owens, Manugistics' chief executive, blamed the shortfall on difficult economic conditions. He had said in recent months that demand and pricing for the company's software was strong. The company sells software to manage factories and suppliers. It competes with i2 Technologies, among others.

Owens said it's not clear when spending will improve, so he will undertake cost reductions, including an unspecified number of job cuts. Manugistics fired 180 people, or 12 percent of its staff in October, leaving it with about 1,500 employees. The company ended a program in March that forced employees to take a few days of unpaid leave every month.

Manugistics didn't provide targets for the period ending in August. For the May-ended quarter, the company said late Tuesday that total revenue would be $71 million to $73 million, compared with its previous target of $84 million to $85 million.

Although some analysts had recently noted the company's business was lagging expectations, most were surprised by the magnitude of Manugistics' shortfall because executives had sounded upbeat earlier this year. Several brokerages, including Goldman Sachs and Thomas Weisel Partners, reduced their ratings Wednesday.

Chris DeBiase of Goldman Sachs and Co., who had recently lowered forecasts for the quarter and fiscal year, said in a research note that "the miss was even worse than expected." DeBiase noted the company is now in a "precarious" financial position. Manugistics has about $250 million in long-term debt and about $200 million in cash.

Copyright © 2002 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.