JD Edwards & Co previewed poor second-quarter results on Monday as the Denver-based ERP software maker said license revenue continued to fall. In what amounted to the company’s second negative pre-announcement in as many quarters, JD Edwards said that for the quarter ending April 30 it expects to report total revenue in the range of $215m to $235m, which would be 3.0% to 12% rise over the year-ago quarter’s $209m.
License fee revenue is projected to be in the range of $60m to $65m and the company said sales were adversely impacted by a general slowdown in demand for enterprise software as companies continue to focus resources on Y2K issues. The shortfall in license revenue and other factors will result in an operating loss that could amount to more than $25m. Analysts surveyed by First Call had been expecting net earnings of $0.05.
The additional drags on the quarter were the impact of headcount additions made in the first quarter, investments in product development and marketing and a $2.1m charge for the write-off of in-process research and development related to the acquisition of Premisys Corp.
The company asserts that it is still financially healthy, however, with roughly $500m in cash and investments, and no debt. It insists that its aforementioned investments and the sales force hiring will provide long-term benefits to the company. Results for the quarter will be reported on May 26.
