SAN FRANCISCO (AP) — Investors bailed out of Informatica Corp.'s stock late Thursday after the business software maker warned its second-quarter results didn't live up to the projections of its management or analysts.
The bombshell drove down Informatica shares by $10.97, or 25 percent, to $32.40 in aftermarket trading. The stock closed the regular session at $43.37, up 36 cents for the day and about 9 percent since the start of the year.
If the plunge carries over into Friday's regular trading, it will represent the deepest drop in Informatica's shares in nearly 11 years. It would also shove Informatica's shares to a new 52-week low.
Informatica said its second-quarter earnings will be 27 cents or 28 cents per share, excluding employee stock compensation, accounting charges for past acquisitions and certain other items unrelated to its ongoing business. Revenue for the three months ending in June is expected to range $188 million to $190 million, a slight drop from the same time last year.
Analysts, on average, had projected adjusted earnings of 36 cents per share, on revenue of $217.3 million, according to FactSet.
The company, which is based in Redwood City, Calif., had previously predicted adjusted second-quarter earnings would range from 35 cents to 37 cents per share on revenue ranging from $210 million to $220 million.
"Clearly, we did not adapt as rapidly as we should have to the changing macroeconomic environment, especially in Europe," Informatica CEO Sohaib Abbasi said in a statement.
In a particularly troubling sign, Informatica said its sales of new software licenses during the quarter ranged from $70 million to $72 million. That translates into a decline of 16 percent to 19 percent from the same time last year. Licensing trends are a closely watched gauge of a software maker's health, because those sales generate a steady stream of future revenue from maintenance and service fees.
Abbasi told analysts in a Thursday conference call that the corporate decision makers became more reluctant to make major technology purchases, particularly in Europe, as debt problems in Greece and Spain raised fears of a spreading financial contagion that would weaken a still-feeble economy.
"I met with several customers where we were expecting their business last quarter," Abbasi told analysts. "In almost all of those cases, I sensed a cautionary tone that they were taking a little extra time, a little more diligence."
Informatica is still counting on most of the deals postponed in the second quarter to close later this year. The company plans to provide more details about its outlook on July 26, when it is scheduled to release its full second-quarter results.