Logistics software firms hit by world economic woes
The downward spiral of the world economic situation is slowing the purchase of logistics software leading to disappointing performances and sluggish forecasts for several leading software manufacturers.
Silicon Valley's Oracle saw a major slide in its stock earlier this week, following warnings from analysts to expect a global downturn in software and hardware sales.
Officials from Germany-based software giant SAP cited the evolving world financial crises as the reason for lower than anticipated preliminary third quarter results.
'The market developments of the past several weeks have been dramatic and worrying to many businesses. These concerns triggered a very sudden and unexpected drop in business activity at the end of the quarter,' said Henning Kagermann, SAP co-chief executive officer.
SAP, which will officially release third quarter results Oct. 28, expects revenue from software and software-related revenues to be in the range of $2.71 billion to $2.72 billion, a 13 percent to 14 percent increase compared to the same period last year, but lower than previously predicted.
The firm expects its Americas region to perform 'less buoyantly' than the firm's other regions, with a projected 12 percent increase in revenue growth. The firm's Asia and Japan region is forecast to increase about 18 percent with its Middle East region projected to see a 14 percent increase.
SAP told employees Thursday that it was implementing cost-cutting programs, including a hiring freeze, according to an internal e-mail obtained by German newspaper Rhein-Neckar-Zeitung. Additional steps, including cuts in travel expenses, will also be implemented. The e-mail indicated the moves were precautionary, in light of the worsening world financial situation.
The SAP news follows closely on reports of weaker than expected financial results from U.S. software firm Manhattan Associates and U.K.-based Kewill Systems.
Atlanta-based Manhattan Associates said the firm's second quarter consolidated revenue increased 1 percent to $90.5 million, compared to the same period last year. While services revenue grew by 12 percent to $62.3 million, the firm's license revenue dropped 17 percent to $19.4 million.
Kewill, in announcing its 2007-2008 fiscal year results, said the firm would see 'a substantially weaker financial performance in the Americas than in Europe.' Kewill’s overall revenue increased to $88.1 million, or 22 percent, compared with 2006-2007. While European revenue grew 32 percent to $51.7 million, the firm's Americas revenue saw a smaller 6 percent increase to $32.5 million. ' Keith Higginbotham
Logistics software firms hit by world economic woes
