Autonomy Slumps After Software Company Lowers Full-Year Revenue Forecast
Autonomy Corp., the U.K.’s second- largest software company, fell the most in eight years in London trading after lowering its forecast for full-year sales growth.
Full-year revenue will be 3 percent lower than the current consensus, equating to growth of about 17 percent compared with a year earlier, the Cambridge, England-based company said in a statement today. Autonomy dropped 16 percent, the biggest decline since October 2002.
Autonomy is “noticing customers still showing volatility around their view of the current macro-economic situation,” so the company is taking “a prudent approach to forecasting” following its “seasonally weakest” quarter, Chief Executive Officer Mike Lynch said in the statement.
Autonomy fell 301 pence to close at 1,551 pence as of 4:30 p.m. Before today the shares had gained 23 percent this year.
“The ramp-up of new product cycles, which are more discretionary, as well as a generally challenging operating environment increase risks around quarter-end,” analysts at Goldman Sachs including Mohammed Moawalla said today in a note to clients. Goldman Sachs today removed Autonomy from its “Conviction Buy” list.
Autonomy said in July that corporate and government clients remained “cautious” on spending, and new contracts with other technology equipment makers had declined.
“Mike is perhaps running a bit shy,” said George O’Connor, an analyst at Panmure Gordon. “The end of the fourth quarter is a long way off and software is typically sold at the end of the period.”
To contact the editor responsible for this story: Vidya Root at firstname.lastname@example.org.