Cognos To Cut Jobs, Warns 1Q Revenue Will Be Flat

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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