slashed its second-quarter and full-year outlook, saying tightened state education budgets are resulting in lowered revenue.
The school improvement company now expects to earn about $8.8 million, or 25 cents a share, for the quarter on revenue slightly above $33 million. Wall Street had been looking for 27 cents a share on revenue of $37.60 million.
In a press release, the company said, "Expected stabilization in state funding for schools has not materialized. In fact, the situation in several states has worsened, particularly affecting schools' willingness to try new software products and to allocate resources to teacher training."
The company added that it's receiving much lower revenue from new products than expected, and in addition to lower state spending, it appears federal funds will be slower in reaching schools than anticipated.
Renaissance also cut its revenue growth estimates for the full year to 5% to 10% over 2001's results. Analysts had been looking for $157 million for the year, compared to $132.4 million in 2001. Despite the lower revenue, the company said it should deliver earnings growth of about 20% for the year, below the consensus estimate.
Shares of Renaissance Learning closed at $23.91 Wednesday before the news.