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Inktomi Corp. (Nasdaq: INKT) was down 2.69 at 15.81 early Thursday after the company warned that revenue and earnings for the first quarter ended December 31st will be below previous expectations.
The Foster City, California-based maker of Internet software said revenue for the quarter will be US$80 million to $81 million, up 121 to 124 percent over last year's first quarter, with pro forma diluted earnings per share of breakeven to a penny.
For the fourth quarter, Inktomi reported revenue of $78.6 million, up 190 percent from a year earlier, and pro forma earnings before special items of $8.8 million, or 7 cents per share, compared with a loss of $6.1 million, or 6 cents.
President and chief executive officer David Peterschmidt said the lower expectations for the fourth quarter reflect a sluggish economy. "The current conditions in the U.S. capital markets and the broader economy have resulted in a slowdown in infrastructure spending," Peterschmidt said in a statement issued after the close of trading Wednesday.
"While our business will be affected by macroeconomic conditions in the near term, we are confident in the long-term outlook for our infrastructure products and services," Peterschmidt added. "We believe we have the management, products and financial focus to foster long-term benefits for our shareholders and customers worldwide."
Inktomi shares have taken a beating lately, and are trading near a 52-week low of 13.25, well below the year's high of 241.50.
Thomas Weisel Partners reportedly downgraded Inktomi to market perform from strong buy following the latest announcement.
On Wednesday, Inktomi fell following reports that analysts at Merrill Lynch and Robertson Stephens downgraded the stock. Merrill's Henry Blodget reportedly lowered his intermediate-term rating to accumulate from buy, citing the effects of a slowdown in information technology spending.
Inktomi plans to report first-quarter results on January 18th.
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