PC graphics software supplier Micrografx said on Wednesday that it expected fiscal fourth quarter revenues and profits to fall well below Wall Street's expectations.
For the quarter ending 30 June, 1999, the company said it anticipated sales would be between $10-10.5 million compared with revenues of $19.6 million in the year ago period.
Net losses would range from between $0.46-0.54 per share compared with profits of $400,000 or $0.03 per diluted share. But this did not include a one off charge related to inprocess research and development due to Micrografx's purchase of Intercap Graphics Systems.
As a result, of the anticipated loss, however, the company said it had reevaluated its book tax assets and expected to take another one time non cash book tax expense of about $0.15 per share for the quarter.
But even if the two costs are not included, Micrografx still said it expected to make an operating loss of between $0.31-0.39 per share. The First Call analysts' consensus estimate had anticipated net earnings of $0.04 per share and as a result, the firm's share price fell $0.5938 to close at $4.4375.
Doug Richard, Micrografx's president and chief executive, said: "Being unprofitable for the quarter is a disappointment. Our results for the quarter are not acceptable and we have already taken steps to reduce our costs to ensure we remain fiscally healthy. We can see our true operating costs have remained flat, even with the acquisition of Intercap Graphics Systems."
He added: "Going forward, we recognise reduced expenses after having aligned the Micrografx and Intercap development teams and support services groups to fit the company's core strategy."
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