Sterling Says Acquisition Will Affect Fourth Quarter.
Sterling Software Inc has warned that its fiscal fourth quarter
earnings won't make analyst expectations. The company blamed its
recent $168m acquisition of Information Advantage Inc, completed last
week, for the shortfall. A restructuring of its application management
business to integrate the new business hurt its revenue in this area -
which accounts for around half of total revenue. Application management
revenue is expected to fall compared with revenue in the third quarter.
Before acquisition charges, Sterling now expects earnings of $0.47,
rather than the $0.52 Wall Street had been expecting. The quarter ends
in September. For the year, Sterling expects to still meet its plan, and
expects growth in the 20% range year-on-year for revenue and earnings.
Sterling said it would repurchase 5 million shares of its common stock
because it says it is undervalued.