webMethods Sinks on Profit Warning - TheStreet

webMethods Sinks on Profit Warning

The company says first-quarter revenue and earnings will be below its prior guidance.
Publish date:

Software provider



lowered its guidance for the fiscal first quarter, citing particular weakness in its North American operations, and the company's shares were sinking in premarket trading.

For the quarter ended June 30, webMethods expects to report revenue of $42 million to $43 million, which is below the guidance given in April of $45 million to $50 million.

Using generally accepted accounting principles, the company is expecting a loss of 13 cents to 15 cents a share. Excluding amortization of stock compensation and warrant charges, webMethods said it will probably lose 11 cents to 13 cents.

"Although integration remains a top spending priority for CIOs, we are not immune from the challenging U.S. macroeconomic environment," the company said in a press release. "We were cautious about our fiscal first quarter and the IT spending environment remained tough. We are disappointed by our financial performance and the unexpected weakness in our North American commercial operations. However, we are confident in our longer-term outlook."

Analysts polled by Thomson First Call expect webMethods to lose 1 cent a share on revenue of $48 million in the fiscal first quarter.

In Instinet trading before the opening bell, webMethods was dropping $1.07, or 13%, to $7.30.