Rational Software Takes Guidance Slightly Lower

Rational Software (RATL Quote) expects to report fourth-quarter earnings of 20 cents to 22 cents a share, a range that could put the company below Wall Street's estimates, and the software maker also disclosed plans to cut its workforce by 10%.

For the fourth quarter ended March 31, analysts expect Rational Software to earn 22 cents, up from 18 cents in the same quarter last year, according to Thomson Financial/First Call.

Rational Software expects to post revenue of $240 million to $245 million, while analysts anticipate revenue of $252.7 million, according to First Call. In the year-ago fourth quarter, the company reported a top line of $180.4 million.

The company plans to cut its workforce by roughly 10%, or 400 employees. The job cuts will result in a charge of $20 million to $25 million in the first quarter.