Manugistics Group Inc, Rockville, Maryland supply chain management company, has warned investors that it will make a surprise operating loss for its first quarter to May 31; and not the $0.12 per share profit that analysts were predicting. The company said it was still too early to disclose the scale of the loss, which is hardly surprising as the quarter hasn’t even closed yet, but the phrase ‘operating loss’ means before one-off charges, showing that the underlying business hasn’t performed. Software companies traditionally sell huge amounts of products towards the end of every quarter, sometimes referred to as the ‘hockey stick’ sales curve, but Manugistics appears to have given up hope of a last minute miracle from its sales team. The warning is doubly surprising considering Manugistics’ recent history of beating earnings expectations quarter on quarter for over a year now, and the stock is trading on stiff expectations at over sixty times current year’s expected earnings. The company said quarterly revenues would still be up year on year, but original expectations were for around double last year’s figure. Manugistics made its official statement after the close of markets on Thursday, but BT Alex Brown Inc analyst W Christopher Mortenson, appears to have got wind of the problems a little earlier, and his disparaging comments prompted a 16% fall in the share price on the day. The company is officially due to report its earnings on June 25.
