SumTotal Systems falling on Q2 profit drop
Shares of SumTotal Systems, Inc. (Nasdaq: SUMT) are down $1.89, or 24%, to $5.85 at 11:51 a.m. ET following news the provider of talent and learning management solutions saw its second-quarter profit decline.
The net income for the three months ended June 30 was $1.9 million, or $0.06 per share, compared with a net income of $2.3 million, or $0.09 per share, during the same period of 2006, the Mountain View, Calif.-based announced after Tuesday’s close.
Revenue jumped 15% to $30.5 million in the second quarter, compared with $26.5 million a year earlier.
“We achieved record revenue, record deferred revenue, and record cash flow from operating activities,” said CEO Don Fowler.
The quarter’s revenues were buoyed by the signings of many big name government and corporate clients. SumTotal Systems’ rolodex now includes the U.S. Army, California’s San Bernardino County, as well as ExxonMobil, Random House, and Yamaha Motor Corp.
Looking ahead, the company expects to end the third quarter with revenues between $29.0 million and $31.0 million. That’s below the projected revenue of $32 million, according to a poll of eight analysts by Thomson Financial.
Net income is also expected to fall short of expectations. The company forecasts profit between $1.0 million and $2.0 million, or between $0.03 per share and $0.06 per share.
However, Wall Street was calling for net income of $0.21 per share.
During the third quarter of 2006, SumTotal Systems brought in $27.5 million for a profit of $1.1 million, or $0.04 per share.
