Entrust Reduces Guidance, Cites IT Spending Slowdown

Entrust Technologies (ENTU Quote - Cramer on ENTU - Stock Picks) expects to badly miss Wall Street's earnings estimates in the first quarter after software license sales failed to meet the company's projections.

The company, which makes encryption software, said revenue would be $31 million to $32 million, yielding a loss of 32 cents to 34 cents a share. Entrust previously expected sales of $50 million to $51 million, with earnings of 1 cent to 2 cents a share. Thomson Financial/First Call polled 17 analysts who estimated, on average, that Entrust would earn 2 cents a share in the first quarter. The company will report actual results on April 24.

The softer economy in the U.S. and slowing global spending on information technology dragged down Entrust's top and bottom lines. The uncertainty of the economy also prevented the company from offering guidance for the full year.

Entrust dropped $2.78 to $4.50 in after-hours trading on Island, down from a $7.28 regular-session close on the Nasdaq. The stock had already lost 97 cents by the 4 p.m. close.