- The Washington Times - Monday, March 11, 2002

Shares of Manugistics Group Inc., which had gone through a turbulent year as the economy went into recession, have risen more than 20 percent since the software company said last week its fourth-quarter revenues will be higher than analysts expected.
The stock closed at $19.42 Friday on Nasdaq, up $5 from the week before and about $14 from its year low of about $5 following September 11.
"Total revenue will exceed company guidance and analyst expectations, with better than expected performance in revenues and adjusted earnings," the company said in a statement, adding that quarterly and annual earnings will be announced March 26.
Manugistics, of Rockville, was expected to report a loss of 6 cents per share on sales of $69.9 million for the fourth quarter ended Feb. 28, according to analysts surveyed by IBES International, a consultancy.
The company suffered last year as corporate America cut back on technology spending. It laid off about 1,500 workers and it required all U.S. employees to cut their hours by 15 percent and take unpaid leave in order to cut back on spending.
Last week Manugistics said it would discontinue this practice in the next couple of months.
Before the economic downturn the company was one of the leading chain software-supply companies, offering programs that connect various information and communication networks inside corporations. Among its clients are giants like Boeing Inc.
The Ford Motor Co. is also a client, and one that caused Manugistics' stock to trade low in recent weeks, as rumor circulated that Ford would discontinue some of its technology programs. Both companied denied the rumors.
"That had impacted the stock negatively quite a bit," says Naveen Chaudhary, an analyst with McDonald Investments in New York. "But the fact that they were able to meet and beat numbers for the current quarter is obviously a positive sign."
Although technology spending remains tight, it is slowly loosening up and analysts expect it to relax even more in the second half of the year.
"It's starting to stabilize and there are certain pockets that will see strength within software and supply chain is one of those," says David Hilal, an analyst with Arlington-based Friendman, Billings, Ramsey. "So we're fairly optimistic about [Manugistics] outlook."
Both analysts rate the stock a buy. They also agree that part of the reason Manugistics seems to have turned the corner by having higher than expected sales is because the company's clients are so diverse in terms of industry.
"They cater to a dozen end companies, not one like technology, per se," Mr. Hilal says. "They are into a lot of end markets from automotive, retail, government and industrials, and that diversification is helping them weather the storm."
For its third quarter ended Nov. 30 Manugistics said net loss was $44.98 million (66 cents per share) from an income of $9.42 million (14 cents) during the like time a year before. Revenues during that time slipped 2 percent to $68.75 million from $70 million.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide