DJ Manugistics Up 8% Ahead Of 1Q Financial Report Tue
NEW YORK (Dow Jones)--Shares of Manugistics Group Inc. (MANU) rose as much as 15% Tuesday amid a moderate Nasdaq selloff, as investors sought to buy the stock ahead of the company's first-quarter results, slated for release following the final bell.
In late-morning trading Tuesday, shares of the Rockville, Md., software developer changed hands at 14 13/32, up 1 15/32, or 11.4%, after earlier touching 14 7/8. Nasdaq volume reached 1.4 million shares, compared with average daily turnover of 392,500.
Wall Street currently expects Manugistics to deliver a loss of 4 cents a share for the first quarter ended May 31, according to a First Call Corp. survey of analysts.
"It's feasible that they could be beat expectations," said Catherine Moore, analyst at First Albany Corp. "With that said, expectations are set pretty low." Company officials, according to Moore, have been guiding analysts to about break-even.
With such self-consciously conservative guidance, Wall Street perceives Manugistics as a safe haven, Moore suggested, since it's a good bet they'll meet or top analysts' low-set targets. Moore rates the stock a neutral and expects the company to lose 2 cents a share in the quarter.
Still, some company watchers are interpreting Manugistics' performance during the period as a sign of a successful turnaround. Should the company meet estimates, it will be the second quarter in a row of in-line results, said Christopher Desautelle, analyst at Legg Mason Wood Walker.
But those two quarters follow several "dismal" showings, Desautelle noted, when the company suffered from a number of "execution" snags as well as clients preoccupied with year-2000 computer-bug issues. Amid the downturn last year, Manugistics placed itself on the auction block, only to retract the offer in January, hire new management and attempt a comeback.
"A number of packaged-good deals closed in the quarter," Desautelle said. Three of those contracts - for supply-chain management software used by factories - are worth over $10 million, he said.
"That doesn't mean all that revenue will be taken in the quarter," Desautelle noted. But the heightened activity means the company's revenue from software license fees is growing, and license fees are a "leading indicator" that soon to follow will be software-services revenue, the bulk of Manugistics' top line.
For the second quarter, both Desautelle and Moore expect Manugistics to record $17 million in license revenue, flat with the year-ago period, but up sequentially from the $15 million it reported in the first quarter.
"People are anticipating a strong quarter," Desautelle said, "maybe not on the EPS line as much as the revenue line."
The analysts also predict $23 million to $24 million in software-services revenue, about flat with the year-ago quarter and the previous quarter.
Company officials were not immediately available for comment. - Scott Eden; 201-938-5173 |
