BEA Systems Warns, Will Cut up to 10% of Workforce

It also reduces next quarter's guidance, citing a 'challenging' environment.
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BEA Systems

(BEAS)

, the applications server software firm that recently had a change at the helm, warned today that profits and revenues for its fiscal third quarter, which ended yesterday, would be lower than expected. The company also took down its guidance for its fiscal fourth quarter and said it plans to cut 9% to 10% of its 3,300 employees by the end of the year.

The company expects to report earnings of 5 cents to 6 cents per share on revenue of $217 million to $221 million for its fiscal third period. Analysts were expecting the company to show earnings of 8 cents a share on $253.5 million in revenue, according to Thomson Financial/First Call.

For its fiscal fourth quarter, which concludes at the end of January, the company said it expects earnings of 6 to 7 cents per share, and sequential revenue growth in the low single digits. Analysts were expecting 9 cents in earnings but had already modeled in just 3.6% in revenue growth for the period.

"BEA's position as a leading e-business infrastructure software provider is stronger than ever," said Alfred Chuang, who

succeeded Bill Coleman as the firm's CEO last month. "There is no doubt, however, that the current economic environment is very challenging."

In addition, the software outfit said it would take a $110 million charge for impaired assets and other charges for its fiscal third quarter, and a $15 million to $20 million charge in its fiscal fourth quarter for severance arrangements.

The firm will report official results Nov. 13.