Entrust Technologies (Nasdaq: ENTU) fell US$2.59 to $4.69 in morning trading Tuesday, after lowering its expectationsfor the first quarter because of a slowdown in corporate software spending.
The company said it expects a loss from operations of 32 to 34 cents pershare for the quarter ended March 31st, rather than profit of 1 to 2cents. Entrust lowered its revenue forecast to $31 million to $32 millionfrom $50 million to $51 million.
“Our first-quarter results were affected by a significant reduction inexpected software license sales, primarily attributable to the slowing U.S.economy, which has profoundly impacted information technology project and expenditureplans,” said chief financial officer David Thompson, who is serving asinterim co-president and co-chief executive officer.
“By the end of the quarter, the issue had clearly begun to impact budgetaryIT plans outside of North America, affecting our ability to close softwaredeals globally,” Thompson added.
Thompson did not give a forecast for the full year, citing “the lack ofclear visibility into the duration and severity of the (economic) downturn.”
Entrust software is designed to help companies ensure the security ofinformation exchanged over the Internet.
Separately on Tuesday, Entrust said it formed a new subsidiary to provideservices to the healthcare industry. Entrust HealthCentric will host andmanage transaction services for healthcare organizations, and will helpstandardize security and policy procedures among different segments of thehealthcare market, the company said.
Entrust plans to report first-quarter results after the close of trading onApril 24th.