Network security software and services outfit Axent Technologies Inc delivered the poor first-quarter results it warned of in early April, with numbers that showed a serious decline year- over-year and fell short of Wall Street expectations. The Rockville, Maryland-based company reported a net loss of $6.1m on revenue that rose 5.5% to $21.4m. The loss from the corresponding quarter last year was $9.9m. But excluding one-time acquisition charges of $3.8m and $17.4m, pro forma net loss was $0.09 per share, against net earnings of $0.12 per share in the year-ago period.
Analysts surveyed by First Call were expecting a smaller loss of $0.07 per share for the quarter. The loss breaks Axent’s 11- quarter streak of exceeding expectations. It doesn’t figure to get any better for Axent any time soon, as operating losses are projected for the next two quarters as it continues to integrate acquired businesses. During the first quarter, Axent purchased intrusion detection specialist Internet Tools Inc for $26.5m and UK-based security firm PassGo Technologies for $50m.
On April 5, Axent had warned of the first-quarter loss and said it expects to show break-even results for the entire year. The company said that it has seen unanticipated delays with a number of enterprise orders for a variety of reasons, including the shifting of customer budgets and spending to Y2K and other issues. Consequently, product license revenue fell 6.7% to $15.2m in the quarter, while services revenue rose 54.6m to $6.3m. In light of the current climate, it now expects full-year 1999 revenues to be in the range of $120m to $130m, up from $101m last year. Although that represents an approximate 24% increase, it is still down significantly from revenue growth of 44.7% and 90.7% for 1998 and 1997, respectively.
