Business software maker Lawson Software Inc posted a first-quarter profit that beat market expectations, helped by increased license fee revenue and expense cuts, and forecast second-quarter results in line with Wall Street view.
For the second quarter, the company forecast earnings, excluding special items, of 7 cents to 9 cents a share, on revenue of $175 million to $180 million.
Analysts on average expect earnings of 9 cents a share on revenue of $176 million, according to Reuters Estimates.
The company also said it will cut about 75 jobs, primarily in its consulting services in Europe.
The company said the reduction, which is less than 2 percent of its worldwide workforce, will result in pre-tax charges of about $4 million in the second quarter.
It was a result of our moving to our vertical structure. We have more visibility in the business and we were able to identify pockets of the business that were not as efficient as we had hoped they would be, Chief Financial Officer Robert Schriesheim told Reuters by phone.
Consulting revenue in the quarter declined 29 percent to $57.6 million, driven by fewer billable consultants, the company said.
First-quarter net income was $6 million, or 4 cents a share, compared with a loss of $3.7 million, or 2 cents a share, a year ago, the company said.
The company, which competes with SAP and Oracle, said revenue for the quarter fell 11 percent to $169 million.
License fee revenue rose about 23 percent to $25.9 million due to the recognition of some fourth-quarter sales stimulus program deals that were deferred to the first quarter and earlier completion of some customer implementation project milestones, the company said on a conference call with analysts.
Typically we experience a sequential increase of approximately 30 percent in our license revenues from first to the second quarter. This year we anticipate a modest sequential decrease in license revenue since first-quarter was exceptionally strong, Schriesheim said.
Excluding special items, the company earned 9 cents a share.
Analysts on average were expecting earnings of 5 cents a share, on revenue of $161.8 million.
Total expenses for the quarter were $77.7 million, down 14 percent from the prior year.
Shares of Lawson Software, which have gained more than 50 percent in the last six months, were at $6.80, up about 9 percent after the bell. They had closed at $6.24 Wednesday on Nasdaq.
(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Maju Samuel)