BroadVision Sees Wider Than Expected
Loss
Reuters
NEW YORK--Software maker BroadVision Inc.
(BVSN.O) warned on Tuesday of a
wider-than-expected second-quarter loss, announced its
chief financial officer resigned and said it has cut nearly
a third of its work force to counter the effects of the
technology slowdown.
BroadVision, which makes software that lets
businesses sell their products and services over the
Internet, blamed a slow economy which has led
customers to postpone purchases. Analysts said
European demand also was particularly weak.
The company said it has cut 695 workers, or 32
percent of the total, since March 31, more than double
the work-force reduction it announced in April.
Chief Financial Officer Randall Bolten, who is
leaving, said BroadVision would take a second-quarter
reorganization charge at least double the $30 million to
$50 million it previously forecast.
"The last few years, there was panic buying because
companies had to get on the Internet as fast as possible,"
said Banc of America analyst Greg Vogel. "Companies
like BroadVision were growing and hiring as fast as they
could. Now that you've got revenues declining, it leads
to layoffs."
Shares of BroadVision fell 89 cents, or 18 percent,
to $4.04, the low end of a 52-week range of $2.50 to
$56.88. The stock was among the worst percentage
losers on the Nasdaq market.
Among BroadVision's competitors, Art Technology
Group Inc. (ARTG.O) has also announced layoffs and
lowered its second-quarter guidance, while Open Market
Inc. (OMKT.O), Vignette Corp. (VIGN.O) and Blue
Martini Software Inc. (BLUE.O) have not made any
comments on their quarters.
But Vogel said the industrywide malaise could yet
take its toll.
"In the software industry in general, e-business
companies are at risk," he said. "It's certainly not going
to be easy for any of them."
'USUAL SUSPECTS'
The factors behind BroadVision's revised guidance
were predictable, analysts said.
"It sounds like it's the usual suspects as to the
reasons why," said Salomon Smith Barney analyst
Heather Bellini, citing the slowdown in technology
spending and softness in Europe, "where we're hearing
spending has dried up over the last four to six weeks."
Redwood City, California-based BroadVision said it
expects to post a pro forma loss of 17 cents to 20 cents
before items on revenues of $52 million to $58 million.
Analysts were expecting a loss of 9 cents to 15 cents,
with a mean estimate of 11 cents, on revenues of $84.8
million, according to research firm Thomson
Financial/First Call.
Bolten, who had been with the company since its
start-up, will be replaced on an interim basis by
Corporate Treasurer Terry Davis.
Also leaving the company was Senior Vice President
and General Counsel Scott Neely, who was named on
Monday as general counsel of privately held software
firm Asera Inc.
"There's a lot of management shake-ups going on
and that's just a sign of the times -- a way for companies
to regain investor confidence," Bellini said.
GOING FORWARD
BroadVision said it is ready to make further
reductions in spending and staffing levels if economic
conditions do not improve.
"We will continue to monitor the environment and
make adjustments to make sure our expenses are under
control," President and Chief Executive Pehong Chen
said in a conference call with analysts.
Banc of America's Vogel said the company's
revenue mix was of some concern. BroadVision said it
expected to report $17 million to $20 million in license
revenue and $30 million to $35 million in service
revenue for the second quarter.
"The concern here is that the services number is
going to shrink because it lags behind licenses," he said,
as companies like BroadVision first sell the software,
and then implement it.
"We should expect things to be pretty weak in the
next few quarters," he said. |
