Shares of Computer Associates, BMC Software, Compuware Corporation, and others have suffered serious setbacks on the stock market in recent days due to shortfalls in revenue. Most vendors blame it on a failure to close large deals near the end of the quarter. Once again, the dreaded Wall Street "whisper number" has not been made, and the stock market has reacted harshly. Sales of mainframe software have softened, causing much of the shortfall.
As examples, shares in Computer Associates (NYSE:CA) dropped as much as 42 percent at one point, even though their revenue has increased to approximately $1.25 billion, compared to $1.22 billion in the same quarter last year. BMC Software (NASDAQ: BMCS) dropped 31 percent after it announced an approximate 50 percent drop in revenue compared to the same quarter in the prior year.
Market Impact
Many of the vendors are blaming the delays in contract closings on customers who are delaying purchases until the release of IBM's new G7 IBM mainframe hardware, and general softness in the mainframe business.
Computer Associates held its annual analyst conference in conjunction with CAWorld in New Orleans in June, and gave no indication that there would be problems with forecasted revenue, particularly in the EMEA (Europe, Middle East, and Africa) market. According to a recent statement from Sanjay Kumar, president and COO of CA, "We intend to work aggressively to address the performance issues in our European business."
Beth Chappell, Executive Vice President of Corporate Communications and Investor Relations for Compuware (NASDAQ: CPWR) stated, "We are very disappointed with our software sales results. In spite of our best efforts to work closely with the investment community to set reasonable and attainable expectations for the quarter, the softness of the market had a significant impact on our results. Once again, we had several large deals that did not come in at the end of the quarter."
As examples, shares in Computer Associates (NYSE:CA) dropped as much as 42 percent at one point, even though their revenue has increased to approximately $1.25 billion, compared to $1.22 billion in the same quarter last year. BMC Software (NASDAQ: BMCS) dropped 31 percent after it announced an approximate 50 percent drop in revenue compared to the same quarter in the prior year.
Market Impact
Many of the vendors are blaming the delays in contract closings on customers who are delaying purchases until the release of IBM's new G7 IBM mainframe hardware, and general softness in the mainframe business.
Computer Associates held its annual analyst conference in conjunction with CAWorld in New Orleans in June, and gave no indication that there would be problems with forecasted revenue, particularly in the EMEA (Europe, Middle East, and Africa) market. According to a recent statement from Sanjay Kumar, president and COO of CA, "We intend to work aggressively to address the performance issues in our European business."
Beth Chappell, Executive Vice President of Corporate Communications and Investor Relations for Compuware (NASDAQ: CPWR) stated, "We are very disappointed with our software sales results. In spite of our best efforts to work closely with the investment community to set reasonable and attainable expectations for the quarter, the softness of the market had a significant impact on our results. Once again, we had several large deals that did not come in at the end of the quarter."
