Manugistics Revenue Misses

Its second-quarter loss narrows, but the top line drops on decline in license revenue.
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Manugistics

(MANU) - Get Report

reported a narrower second-quarter loss on lower costs, but the company's revenue dropped and missed Wall Street's expectations.

For the quarter ended Aug. 31, the maker of supply-chain management software reported a loss of $6.1 million, or 7 cents a share, compared with a year-earlier loss of $17.1 million, or 21 cents a share.

Excluding items such as amortization and charges, Manugistics' adjusted loss narrowed to $200,000, or less than 1 cent a share, from $5.6 million, or 7 cents a share, a year earlier. Analysts polled by Thomson First Call were expecting a loss of 1 cent a share on this basis.

The Rockville, Md., company's revenue fell 15% to $43.6 million from $51.3 million, hurt by a plunge in software license revenue. Analysts expected a top line of $45 million.

The revenue from software licenses fell 54% to $5.1 million from $11.1 million, offsetting growth in support revenue, which rose to $21.8 million from $21.3 million. Manugistics' services revenue also dropped, falling to $15.3 million from $16.4 million a year earlier.

The company's headcount at the end of the second quarter increased to 765 from 722 at the end of the prior quarter, primarily because of increased staffing at a new development center in Hyderabad, India. Manugistics reiterated plans to increase headcount and development in India and thus reduce development in the U.S., a move the company expects will lower product development costs by $2 million to $3 million per quarter by the end of fiscal 2006.

Manugistics shares dropped 5.4% in after-hours trading to $1.92, according to Inet.