Adams Harkness Keeps JDA Software at Buy

Analyst John Torrey cites the software company's strong competitive position and product cycle

Jeffries maintains a buy rating on JDA Software (JDAS ) after the company posted 6 cents third-quarter (GAAP) earnings per share on 13% lower revenues.

Analyst John Torrey says the results are in line with the company's preannouncement. He says while he sees no material change in the near-term demand outlook, the company expects restructuring steps in the fourth-quarter to ensure meaningful profitability into 2005. The company expects to rely on "proof-of-concept" or milestone terms more frequently in complex deals to even out the impact of large transactions and add better visibility to the company's license results.

Torrey gives the company credit for its restructuring plans and ups his 18 cents fiscal 2004 earnings per share estimate to 20 cents and raises fiscal 2005 earnings-per-share estimate from 17 cents to 33 cents.