Parametric Technology Corp and fellow design software developer Visio Corp have warned Wall Street that results for their respective third quarters will come in below expectations. Waltham, Massachusetts-based Parametric, which specializes in product development and lifecycle software and services, says it expects revenue to be sequentially higher than its second-quarter total of $263.2m, but about 5% below the consensus estimate of $280m. Earnings per share for the quarter should come in at $0.13 – $0.15, including acquisition-related charges, and $0.15 – $0.17 excluding charges. Analysts surveyed by First Call were expecting $0.18 before charges.
The company is blaming the shortfall on its ongoing transition to a more package-oriented selling approach, which has taken longer than expected to reach full productivity. The problems were particularly noticeable with larger accounts and some of the major deals that were being worked on failed to close in the quarter. The upside, Parametric says, is that the deals in question, which represent more than $100m in business, make the fourth-quarter pipeline look good.
Visio, which develops diagramming and technical drawing software, estimates its third-quarter revenues will be $50m and earnings per share will be in the range of $0.29 – $0.30, compared to consensus estimates of $53.5m and $0.35. The Seattle-based company says the quarter was impacted by a continued slowdown in sales through the channel and delays in closing several large corporate licensing agreements. Looking ahead, Visio expects revenue for its fourth quarter will be at the lower end of current analyst estimates, or about $61m – $62m.
The company insists it has met its previously-announced goal of employing 110 corporate sales staff by the end of June and says it recorded solid growth in its corporate licensing business, but several such deals simply didn’t close in the quarter as anticipated. Making matters worse, business continued to be impacted by what Visio calls an industry-wide shift away from sales of packaged products through traditional channels. It expects that this issue – due in large part to the fact that the Visio 5.0 product line is nearing the end of its life cycle – will remain a factor for the remainder of the fiscal year. The next-generation Visio 2000 product will be available in the September quarter, however, and the company expects the upgrade to be a key revenue driver throughout next year.
