i2 Technologies (Nasdaq: ITWO) fell US$3 to $16.97 in morning trading Thursday, after reporting first-quarter results that were in line with its lowered expectations, and saying the company expects losses for the next two quarters.
Analysts at Salomon Smith Barney, First Union, US Bancorp Piper Jaffray and JP Morgan all reportedly downgraded the Dallas, Texas-based provider of business-to-business (B2B) software and services following the news.
First-quarter revenue for i2 totaled $357 million, up from $186 million a year earlier. However, income before amortization and other items fell to $7.5 million, or 2 cents per share, from $13 million, or 4 cents.
i2 posted a net loss of $774.15 million, or $1.90 per share, compared with net income of $11.74 million, or 3 cents, a year earlier.
Revenue for the second quarter will be “sequentially down” as the company focuses on cutting costs and “positioning for an economic upturn,” said i2 chief financial officer Bill Beecher, adding that the company expects pro forma losses “over the next couple of quarters.”
Revenue growth for the year will likely total 15 to 20 percent, Beecher said.
“The company is not changing its business model,” said chief executive officer Sanjiv Sidhu.
However, i2 has cut more than 600 jobs, and is continuing to reduce costs as part of a restructuring plan announced April 2nd, Beecher said.
i2 lowered its outlook and announced the restructuring plan in response to a slowing economy, saying customers were delaying purchases of new technology.
“It is obvious that the business climate has changed for the worse,” Beecher said.