Development tools company Forte Software has posted a third quarter loss, blaming a slowdown in high end application development projects.
The loss of $6.3 million for the three months to 31 December 1997 was below Wall Street expectations but in line with the profit warning issued by the company earlier this month. The diluted per-share loss was $0.32, at the high end of Forte?s anticipated losses of $0.25-$0.32. Revenue was down marginally to $17.3 million.
The results compare with a profit of $2.5 million in the same period a year earlier, though a loss of $2.2 million was reported in the first quarter of the 1998 fiscal year.
Forte said it believes the market for large scale enterprise development tools is suffering a temporary slowdown, due to the diversion of resources to solve the Year 2000bug, a shortage of skilled programmers and a longer and more complex sales cycle.
?Our quarterly results are disappointing, but the long term outlook remains favourable,? said Marty Sprinzen, president and CEO. ?We have invested heavily in marketing, pipeline development and our salesforce over the last two quarters, while continuing to focus our R&D efforts on our significant Internet, Java and mainframe initiatives.?
Sprinzen added that the company remains optimistic about its long term outlook, and said it would focus sales and marketing efforts to system integrators and pre-built applications and framework resellers.
?As more end users rely on outside expertise for enterprise solutions, a more focused channel sales and marketing drive is needed,? said Jim Wambach, senior vice president of north American sales.
The company said it would also "seize the opportunity presented by the year 2000 problem", stating that many Y2K applications will need to be rewritten rather than fixed. ?Forte?s strength in developer productivity, integration and rapid deployment are a natural fit,? said David Taber, vice president for marketing.
This is the latest poor quarter to hit the company. Last year the company?s shares crashed on the release of its full year results, despite a 110 per cent increase in revenue and profits of $7.2 million. At the time, the company warned of significantly lower growth rates in the first and second quarters of the current year.
This was again attributed to sales problems - due to the turnover of sales staff in the US - but the company insisted that these problems would be in the past within six months.
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