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Cognos says 1Q revenue will be flat, plans layoffs.
Cognos Inc. said Wednesday that revenue for its first quarter, ended May 31, will be flat compared with a year ago and that losses for the quarter could reach $4 million. Because of the expected shortfall, the supplier of business-intelligence software is laying off approximately 300 people--about 10% of its workforce--and taking other steps to reduce spending.
Until now Cognos appeared to be successfully muddling through the economic downturn. Sales for the quarter ended Feb. 28 increased 22% from a year earlier. At that time, Cognos execs said that while some customers were deferring major purchases, demand for the company's business-intelligence software remained strong.
Sales for the first quarter will fall in the range of $106 million to $110 million, compared with sales of $108.7 million for the same period last year, according to Cognos. Net income is expected to fall between breakeven and a net loss of $4 million (4 cents per share) for the quarter, a sharp contrast to the $12 million (13 cents per share) profit the vendor earned one year earlier. The estimates don't include a one-time $13 million charge the company will take against earnings to cover the restructuring expenses. Cognos will release the quarter's final results and guidance about its second quarter on June 21.
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