RWD Technologies Inc. announced yesterday that third-quarter sales and earnings will fall well short of analysts' estimates, the second straight quarter the Columbia-based company has had to issue such a warning.
RWD is projecting a break-even third quarter -- far less than the profit of 13 cents a share that analysts were forecasting. Sales will come in at $29 million, or $4 million below estimates, largely because business dropped off in two of the four key markets that RWD serves, the company said.
"We are disappointed to report that we did not meet the analysts' quarterly estimates for the third quarter. However, that is what occurred," Robert W. Deutsch, RWD's founder, chairman and chief executive officer, said in a statement.
RWD said its "Enterprise Resource Planning" business, which helps companies customize and install specialized business-management software, and its information-technology business both declined in the third quarter. The ERP business was the culprit in the second quarter, too.
On June 15, RWD shares fell 24 percent the day the company said second-quarter results wouldn't meet analysts' forecasts. The shares closed yesterday -- before the company's announcement -- at $8.375, down 6.25 cents, and about two-thirds below the 52-week high of $23.625 reached Nov. 11.
RWD executives say that some of the firm's newer technologies and capabilities -- particularly those aimed at helping client companies establish electronic-commerce businesses -- are essentially gems that Wall Street has not yet discovered or hasn't yet factored into expectations for the coming years. Those will be the engines of future growth, the company says.
Deutsch said he expects "RWD to return to robust annual revenue and profitability growth in 2000." Furthermore, Deutsch said, the company should still be able to achieve $1 billion in annual revenues by 2007, or slightly ahead of the schedule he set out when he founded the company in 1988.
Pub Date: 9/23/99