July 25, 2006, 12:00 AM

JDA’s net income drops 70% as software licenses decline

With a 32% year-over-year drop in software license revenue for the second quarter ended June 30, JDA Software Group reported a 70% drop in net income to $1.08 million as revenue declined 5.6% to $51.8 million.

Paul Demery

Managing Editor, B2B E-commerce

 

With a 32% year-over-year drop in software license revenue for the second quarter ended June 30, JDA Software Group reported a 70% drop in net income to $1.08 million as revenue declined 5.6% to $51.8 million.

"As a consequence of our software performance in the second quarter, we have reduced our annual guidance,” said CEO Hamish Brewer. “We now expect total revenues for 2006 to range from $290 million to $299 million, software revenues to range from $61 million to $70 million.”

Brewer said that JDA’s $211 million acquisition earlier this year of Manugistics, a provider of supply chain software, would “have an immediate positive impact on earnings in the second half of 2006.” He added that Manugistics will help to increase the share of JDA’s revenue from maintenance fees. “We now expect over 45% of our total revenues to come from a stable maintenance base,” he said.

Andrew White, an e-commerce technology analyst with Gartner Inc., says JDA faces the challenge of integrating its technology platform with that of Manugistics. While JDA is migrating its platform to Microsoft Corp.’s web-enabled .Net platform, however, Manugistics technology is built on Java, he notes.

 

 

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