JDA Software Group falls as 2008 guidance disappoints
Shares of JDA Software Group, Inc. (Nasdaq: JDAS) fell due to a disappointing 2008 guidance and despite news after the close on Monday that the provider of supply and demand management software solutions saw a rise in its fourth-quarter and full-year results.
The Scottsdale, Ariz.-based company announced on Monday that total revenues for the three months ended Dec. 31, 2007, were $98.5 million, a rise of 11.2% compared with total revenues of $88.6 million during the final three months of 2006.
The software maker had earnings of $0.35 per share, above the $0.34 per share projected by analysts and a rise of 75% compared with a net income of $0.20 per share a year earlier.
“Our strong performance in fourth quarter 2007 provided the perfect finish to a record year for JDA,” said CEO Hamish Brewer in a statement.
The company reported also that it has signed 72 new software license contracts and has achieved its second best quarter for software license revenue in history. Additionally, global software sales jumped 27% in fourth quarter 2007 compared to the same three months in 2006.
For the entire year, JDA increased its total revenues 35% to $373.6 million, compared with $277.5 million in 2006. Profit more than doubled to $1.33 per share from $0.58 per share in 2006.
Looking forward, the company projected that 2008 net income will be in the range between $1.40 per share and $1.45 per share.
“Market demand for our comprehensive product line continues to intensify among existing and new customers across every industry,” JDA’s chief said in a statement.
However, the forecast disappointed analysts, who were expecting a profit in the higher end of the guidance range. The consensus of three analysts polled by Thomson Financial is for 2008 earnings of $1.45 per share.
“The bottom line is the Street was not happy with the 2008 guidance,” said Andrey Glukhov, an analyst with investment bank Brean Murray, Carret & Co., in a phone interview.
Glukhov has a “buy” rating on the stock with a price target of $28 and said he does not expect the current pullback in consumer spending to negatively affect JDA, which licenses its software mostly to retailers.
“International revenue is rebounding just as domestic revenue is and I think both will continue to improve,” he said.
At close, shares of JDA Software Group (JDAS) were down $1.10, or 6%, to $17.10. The 52-week low of $14.38 was established on Jan. 29, 2007, while the 52-week high of $25.51 was reached on Nov. 2, 2007.
