Informix' nightmare continued yesterday when it reported a second quarter loss more than three times greater than Wall Street had predicted and agreed to restate revenues for its last fiscal year because of accounting errors.
Revenues for 1996 are likely to be $70-100 million worse than the $939.3 million reported in February, and profits of $97.8 million will also be recalculated. This is partly because of Informix' much criticised policy of recognising revenue from resellers before the resellers had sold on the product to users. New president Robert Finocchio admitted the restatement would cover this issue, among others.
He reassured investors that accounting practices had now been tightened up. "We have applied our revenue recognition policies very conservatively in Q2, resulting in recording revenue only for products and services sold directly to end users or through our partners to identified customers," he claimed.
The $120.5 million Q2 deficit - reversing last year's Q2 profit of $21.6 million - included a restructuring charge of $62.1 million. The third quarter is likely to see further pain on this front, with 10-15 per cent of Informix' staff due to be axed in Q3 (see previous stories).
Finocchio would not comment on the fate of the Informix superstore initiative, which some critics see as an over-ambitious venture that was a factor in the database company's recent financial troubles. The question mark hanging over the project has grown larger since this week's departure of deposed chief executive Phil White's right hand man, Ken Coulter, the main proponent of the superstores.
Analysts are concerned at the lack of a full team at the helm of the company - in particular, they are calling on Finocchio to rapidly appoint a powerful chief financial officer and vice president of sales to formulate a credible turnaround plan.
Other priorities, Finocchio said, are to "cut costs, fix the company's ability to execute, articulate the company's position in the marketplace and get great products out the door."
Second quarter revenue fell by 27 per cent to $164.7 million, in line with analyst expectations.
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