Platinum Technology Inc has issued a warning that fourth-quarter results will miss the target considerably and says it will revamp its consulting group as a result. The database and systems management software and services company said it expects revenues for the quarter to be roughly $315m – including roughly $200m in new license revenue – bringing the total for the year to about $970m. At that level, fourth-quarter earnings before charges are estimated to be $0.40 per share, well below the $0.53 analysts surveyed by First Call were expecting. Earnings for the year should be $0.82, up 45% from last year’s $0.56, but also short of the $0.95 consensus. Even as operating margins improved and product license revenue was strong, growing more than 30% for the year, Platinum is blaming the shortfall on a poor performance by its Global Consulting Organization (GCO). It specifically points to weak revenues in Germany and the UK, lower than anticipated demand for the company’s training offerings, and flat growth in Year 2000 services. The news is embarrassing for the company, as services have become a priority with management having pledged to double the GCO’s staff to 3,000 and make it accountable for a third of overall revenues. Thus, Platinum has taken some immediate actions to improve things at the GCO. It has reorganized the unit to align it more closely with the product business, integrated services sales into the worldwide product sales organization and strengthened the management team by bringing on seasoned senior management. New appointments include Hal Carr, previously VP of Oracle’s consulting group, as EVP of the GCO and Judy Fick, formerly of Cambridge Technology Partners and IBM Global Services, as Senior VP of Global Consulting Sales. New country leaders have also been appointed in the UK and Germany.
