Project Software and Development Drops After Warning

Updated from 11:48 p.m. EDT

Project Software and Development (PSDI Quote), a maker of business and electronic commerce software, said Monday that its fourth-quarter profit and sales would fall short of analysts' expectations, setting off a 28% decline in its share price.

The company, which is based in Bedford, Mass., said it expects sales in the period, which ended Saturday, to total $44 million, an increase of 4% over the year-earlier quarter but lower than analysts' expectations.

Project Software's stock finished Monday regular trading down $4.28, or 28%, at $11.25, after hitting a 52-week low of $10.06, well off its 52-week high of $97.38.

Chip Drapeau, the company's chief executive, said a small number of large customer transactions that were expected to be concluded in September will instead by completed in the next quarter. In addition, the Asian market was soft, he said.

The company said it expects to post a profit for the period after adjusting for goodwill amortization, but the profit would fall short of Wall Street's expectations. The company did not provide a profit forecast, but analysts surveyed by First Call/Thomson Financial expected the company to earn 16 cents a share. In the fourth quarter of 1999, the company earned 22 cents a share.

Project Software said that for the fiscal year, its sales totaled about $169 million, an increase of 16% from the prior year.