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Broadbase Software, Inc. (Nasdaq: BBSW) fell in early trading Friday, losing 2 5/16 to 11 11/16 after the company said the closing next month of a planned acquisition will result in a bigger-than-expected loss for the fourth quarter.
Broadbase also said it expects a fourth-quarter loss of 15 to 17 cents per share on revenue of about US$17 million. Gross margins will be "relatively flat" with the third quarter, at 60 to 62 percent, as improvements the company has made during the quarter are offset by the inclusion of costs from soon-to-be-acquired Servicesoft, Inc.
The Servicesoft acquisition will dilute fourth-quarter pro forma earnings by 8 to 10 cents per share, the company said.
According to Broadbase, it has received regulatory approval to go ahead with the Servicesoft acquisition, which is on schedule to be completed in mid-December after shareholders of both companies vote on the plan. As a result, Broadbase will include Servicesoft in its fourth-quarter results.
Servicesoft is likely to boost results next year, however, Broadbase said. Revenue for 2001 is likely to total $145 million, aided by the combination. The company expects a loss before extraordinary items of about 5 cents per share for the year, with losses of 8 cents in the first quarter and 4 cents in the second. In the third quarter, the company expects a 1 cent profit before extraordinary items, and in the fourth quarter, it aims to earn 5 cents per share.
Broadbase chief financial officer Rusty Thomas said the merged company "will hit the ground running."
Menlo Park, California-based Broadbase provides e-commerce software and services to companies including BEA Systems, Cisco Systems, Onvia.com and United Airlines.
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