Lawson Software, Inc. (LWSN) Thursday said its fourth quarter profit nearly tripled from a year ago, helped by gains related to the provision for income taxes, higher gross margins, and lower expenses. Revenue for the quarter dropped 20%, however, was in line with Street estimates. Lawson also provided its earnings forecast for the first quarter, indicated to come in short of analysts' estimate. Lawson shares dropped over 6.67% in after hours trade following the news.
Fourth quarter GAAP net income of Lawson improved to $9.85 million or $0.06 per share from $3.67 million or $0.02 per share in the same quarter a year ago.
Quarterly results primarily reflects a $3.4 million benefit in the provision for income taxes, indicating a reduction in the company's valuation allowance against certain foreign tax assets, increasing net earnings per share by approximately $0.02.
Fourth quarter also included pre-tax expenses of $14.9 million for restructuring, amortization of acquired intangible assets and other items. Excluding expenses and including $0.1 million of revenue impacted by purchase accounting adjustments, non-GAAP net income was $17.02 million or $0.10 per share.
On average, eight analysts polled by Thomson Reuters expected earnings of $0.10 per share for the quarter. Analysts' estimate typically excludes one-time items.
Lawson reported revenues of $186.21 million, down 20% from $233.23 million in the corresponding quarter a year ago, or 11% at constant currency, however, exceeding Street estimates of $177.12 million.
In the sequentially preceding third quarter, profit rose to $7.39 million or $0.04 per share, despite higher revenues. Revenues for the previous quarter dropped 18% to $173.85 million.
License fees for the quarter under review declined 19% or 12% adjusted for currency, consulting revenues declined 34% or 25% adjusted for currency, maintenance revenues declined 4% due to currency, but increased 4% on a constant currency basis.
Gross margin as a percent of revenues increased to 55% from 53% a year ago as a higher mix of maintenance revenues to total revenues offset a lower consulting margin.
Operating expenses declined by $25.8 million but were partially offset by an $8.9 million restructuring charge in the quarter.
Interest income declined $2.4 million or 84% due to lower earned interest on investments, consistent with marketplace declines in interest rates.
For full-year 2009, net income was $18.9 million or $0.11 per share, up from $13.7 million or $0.08 per share a year ago. Excluding expenses, non-GAAP net income was $58.7 million or $0.35 per share. Total revenues were $757.3 million, down 11% from $852 million in the prior year.
The Street expected earnings of $0.35 per share on revenues of $748.52 million for the year.
For the first quarter of fiscal 2010, the company expects GAAP earnings in the range of $0.01 or $0.03 per share and non-GAAP earnings in the range of $0.05.
The Street currently expect earnings of $0.08 per share for the first quarter.
The company also expects first quarter total revenues in the range of $160 million to $165 million. Analysts currently anticipate the company to report revenues of $165.75 million for the quarter.
The company, however, is not providing financial guidance for the full fiscal year ending May 31, 2010 but expects to modestly improve non-GAAP operating margin over fiscal 2009.
LWSN closed Thursday's regular trading at $5.40, up $0.22 or 4.25%, on a volume of 2.46 million shares. In after-hours, the stock dropped $0.36 or 6.67% to trade at $5.04
For comments and feedback: editorial@rttnews.com