Updated from 4:42 p.m. EDT
reported fiscal-year second-quarter earnings Thursday in line with Wall Street estimates, but revenue came in slightly short of expectations and company guidance.
The Rockville, Md.-based company, which makes supply-chain management software, reported a net loss under generally accepted accounting principles of $8 million, or 11 cents a share, in the second quarter. That compares to a net loss of $47.7 million, or 68 cents a share, in the same period a year earlier.
Excluding charges, Manugistics reported a pro forma net loss of $2.6 million, or 4 cents a share, in the second quarter, compared with a pro forma net loss of $13.1 million, or 19 cents a share, a year earlier. Wall Street analysts polled by Thomson First Call expected Manugistics to lose 4 cents a share on a pro forma basis, in line with the company's guidance.
Revenue fell year over year for the 10th consecutive quarter, declining 15% to $59.7 million. The consensus estimate called for revenue to come in at $61.8 million, within the guided range of $61 million to $62 million.
"I made it very clear last quarter we were managing to profitability," Chairman and CEO Greg Owens said in a postclose conference call, responding to a question about why the company's revenue came in a bit light. "We know we've got to be a profitable company."
Manugistics, whose software is used to help companies manage their relationships with suppliers, had forecast it would near break-even on an operating basis in the second quarter and the company delivered there. Manugistics posted adjusted operating income excluding charges of $1.2 million, compared to an adjusted operating loss of $11.2 million in the year-earlier quarter. On a GAAP basis, Manugistics registered an operating loss of $4.2 million, compared with $25.5 million a year earlier.
The company said it expects adjusted net income, excluding charges, to be approximately break-even in the third quarter, with further improvement in the fourth quarter. In the postclose conference call, Manugistics said license and total revenue will grow sequentially in the third and fourth quarters. The third quarter, which ends in November, would mark a return to year-over-year revenue growth for Manugistics.
Analyst estimates called for Manugistics to post a loss of a penny a share in the third quarter on $64.8 million in revenue, and for pro forma net income of 2 cents a share on revenue of $69.8 million in the fourth quarter.
"We are continuing to show consistent signs of improvement," Owens said. "We feel better about the economy and see increased signs of activity."
Such bullish statements apparently encouraged investors, who pushed up Manugistics shares more than 8% to $5.92 in after-hours trading. Shares closed down 24 cents, or 4.2%, at $5.45.
But U.S. Bancorp Piper Jaffray analyst Tad Piper said it remains to be seen whether business is picking up as the company suggests. "They continue to talk pretty optimistically about what they're seeing activitywise," Piper said. "I'd be more convinced by the bullish comments if they exceeded their guidance." Piper has a market perform rating on the company and his firm has done banking business with Manugistics.
Although revenue fell slightly short in the second quarter, the company did release other metrics that hinted at some improvement in business:
Manugistics closed six deals worth more than $1 million, the most since the first quarter of last year.
Manugistics closed 27 significant deals in the third quarter, the highest number in a year.
Thirty percent of deals were from new customers, up from 21% in the first quarter. Half of software revenue came from new customers, vs. 20% to 25% in the previous two quarters.
Fifty percent of software revenue came from international sales.
But while the number of total deals increased, their price tag dropped. Manugistics reported its average selling price fell to $560,000, down from $1.3 million in the first quarter.