Tibco Tanks on Outlook - TheStreet

Updated from March 1

After weeks of rumors that eviscerated its stock,

Tibco Software

(TIBX)

on Tuesday warned that it will not meet earnings or revenue targets for its first fiscal quarter.

In a statement released after the closing bell, Tibco said it now expects to earn a pro forma profit of 4 cents or 5 cents, with revenue ranging from $100 million to $102 million. In December, the company said it expected to earn a pro forma profit of 8 cents a share on sales ranging from $116 million to $120 million in the first quarter.

The stock, which has been in freefall for days, last traded on Instinet for $7.36, down $1.54, or 17%.

"These disappointing results were primarily due to lack of execution in certain geographic areas, particularly in Europe," the company said in a statement, which implied that it would fire at least some of its European leadership team.

The company also blamed the shortfall on the unexpected failure of some large deals to close at the end of the quarter. Rumors about the miss have been circulating for several weeks.

Tibco's nearly 9% drop during the regular session was on volume that was about six times heavier than normal. Tuesday's selloff follows a drop of 8% on Monday, and a series of down days that have knocked 25% off the stock's value since Feb. 18.

The rumors picked up steam Monday when Bear Stearns analyst John DiFucci trimmed his quarterly estimates. "Tibco's February quarter appears more back-end loaded than the previous three periods, with meaningful business still to be closed in the last few days," he wrote in a note published Monday.

Although he cut his estimates, DiFucci said he views Tibco "as an attractive long-term investment in the software sector." Bear Stearns has an investment banking relationship with Tibco.

Tibco sells software used to integrate diverse applications on corporate networks.