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i2 Technologies (Nasdaq: ITWO) fell US$4.13 to $31.38 in morning trading Tuesday after reports said the software maker was partly responsible for problems at footwear company Nike (NYSE: NKE).
In addition, Goldman Sachs was said to have cut earnings expectations for i2, along with other software developers.
After the close of trading Monday, Nike said it expects earnings for the third quarter ending February 28th to be 34 to 38 cents per share, well below previous expectations of 60 to 65 cents.
Nike chairman and chief executive officer Philip Knight blamed the shortfall on weak revenue from the company's U.S. footwear operations.
"During the quarter, we also experienced complications arising from the impact of implementing our new demand and supply planning systems and processes, which resulted in product shortages and excesses as well as late deliveries," Knight said.
News reports identified i2 as the provider of Nike's new software system, which was reported to have cost $400 million. In its news release, Nike did not identify the supplier, and i2 officials were not immediately available to comment.
I2 makes software that helps companies do business over the Internet. The company beat analyst estimates when it reported results for the fourth quarter ended December 31st.
Revenue for the quarter climbed 116 percent from a year earlier, to $378 million, with income before extraordinary items rising to 9 cents per share from 5 cents.
After all items, however, the company reported a net loss of $727 million, or $1.80 per share, compared with net income of $15 million, or 4 cents, in the fourth quarter a year earlier.
I2 chairman and chief executive officer Sanjiv Sidhu said in announcing the results that the company had not seen a slowdown in business, and is positioned to "improve competitiveness even during slower economic growth."
Gruntal & Co. reportedly reiterated an outperform rating on i2 shares early
Tuesday.
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