J.D. Edwards (JDE) shares went into freefall after the company issued a profit warning saying that first- quarter profit and sales will fall short of estimates because companies have yet to boost computer-related budgets.
According to JDE’s chief financial officer Rick Allen, customers have no plans to increase spending next year. He warned that profit, excluding certain costs, in the first quarter ending in January will be flat from the previous year.
First-quarter software-licence sales will be little changed in the first quarter from a year earlier, and services revenue will rise 5 per cent, Allen said. Software sales in the year- earlier period were $43.9 million and services revenue was $156.6 million. Allen's forecast would translate to $208.3 million in total first-quarter revenues rather than the $219.4 million Wall Street had been expecting.
``This is the most difficult market environment that I've seen in my career,'' J.D. Edwards Chief Executive Officer Robert Dutkowsky. ``The global economy continues to be difficult. Our customers continue to struggle with the health of their business, and that reflects on our business.''