Tech Stocks in Motion
Shares of Plumtree Software (PLUM) were among technology's losers Monday, falling 17% after the company cut its second-quarter sales forecast and said that it launched an investigation into the possible noncompliance with the price reductions clause of its contract with the U.S. government.
The company now expects second-quarter sales of $22.5 million. Analysts polled by Thomson First Call had been expecting sales of $25.4 million. In April the company said that it would report a loss of 1 cent to a profit of a penny a share on sales of $24.5 million to $25.5 million. Plumtree blamed the shortfall on several deals that did not close by the end of the quarter.
As for the investigation, the company said that it began to probe the price reductions clause "after becoming aware in February 2005, that in connection with certain sales entered into during the fourth quarter of 2004, it did not comply with the price reductions clause of the GSA contract." Plumtree also said the GSA is considering extending its existing contract with the company. "In connection therewith, the GSA has elected to conduct a pre-award audit of certain commercial sales practice pricing information of the company," Plumtree said. Shares were trading down 75 cents to $3.66.
Orckit Communications (ORCT) fell 9% after the company posted in-line second-quarter earnings but warned that third-quarter earnings would fall short of expectations. The provider of telecom equipment reported earnings of $3.9 million, or 21 cents a share, on sales of $21.8 million. Analysts were expecting earnings of 21 cents a share.A year ago, the company posted a loss of $5.9 million, or 45 cents a share, on sales of $350,000. Looking ahead, Orckit expects third-quarter earnings of $4.2 million, or 23 cents a share, on sales of $24 million. Analysts had been expecting earnings of 25 cents a share. Shares were trading down $2.57 to $25.70.
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