Veritas warns of earnings miss

Veritas warns of earnings miss

Storage software maker Veritas Software warned Tuesday of lower-than-expected revenue in its just-ended second quarter, a shortfall it blamed on sluggish software license sales in the U.S.

Veritas' shares plunged on the news, dropping 35 percent, to US$17.33, in morning trading on the Nasdaq exchange.

Veritas now expects total revenue for the quarter of $475 to $485 million, down from the US$490 million to $505 million it forecast in late April and reiterated in mid-June. Per-share earnings will be $0.17 to $0.19, down from the $0.21 to $0.23 range the company suggested earlier.

Veritas only recently regained its full Nasdaq listing: The company had been trading under an altered symbol to indicate that it was delinquent in filing its annual report, which it delayed because of an internal investigation into accounting violations. Last month, Veritas completed that investigation and restated three years worth of financial results, removing from its books $29 million in revenue.

Veritas Chief Executive Officer Gary Bloom said in a prepared statement that the later part of each quarter's third month is traditionally a strong period for Veritas' software sales; this time, expected deals in the U.S. did not come through. Demand in Europe and Asia-Pacific met expectations, as did Veritas' services business, which brought in $212 million during the quarter, Bloom said.

Veritas plans to announce full results on July 27 for the quarter ended June 30, the second of its fiscal year.

Veritas isn't the only software company to run into trouble this quarter. Integration specialist WebMethods and database maker Sybase also saw their shares tumble following warnings of weak sales. Sybase blamed its miss on "direct sales operations issues" in its North American enterprise business, while WebMethods cited a lower-than-expected closer rate on multimillion-dollar deals.

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