JDA Software Has Its Best First Quarter Ever

Published: May 5, 2008

by Timothy Prickett Morgan

While plenty of IT firms are feeling the pinch in the past two quarters as they try to push products in the United States, this is not the case for all software companies. In fact, retail and supply chain management software maker JDA Software Group just finished the best first quarter of software license sales in its 30-year history. However, the company's net earnings fell a tiny bit, and for once--and probably thanks to a lot of worse news out there--Wall Street seemed to take it in stride and cut JDA some slack.

In the first quarter ended March 31, JDA's software license sales rose by 17.7 percent to just a smidgen over $20 million, while software maintenance fees rose by 3 percent to $45.8 million, yielding total product sales up 7.1 percent to $65.8 million. Services at the company actually fell a bit, dropping 4.1 percent to just over $28 million. All told, JDA had sales of $93.9 million, up 3.5 percent. The company's net income fell by 1.1 percent to $5.36 million. Clearly, JDA's acquisition of supply chain software maker Manugistics is behind it now, and despite the softness that other IT players have seen in the retail sector (notably Sun Microsystems last week said retail was a weak sector in its most recent quarter), the combined JDA-Manugistics stack seems to have stabilized both companies a bit.

"JDA exceeded earnings expectations and closed our strongest first quarter ever for software license deals, which are both major accomplishments and reflect the current strength of our business notwithstanding the present economic environment," said Hamish Brewer, JDA's chief executive officer in a statement accompanying the financial results for the quarter. "While we realized significant competitive wins in every market, our offering was particularly appealing in the Americas as we increased first quarter 2008 software sales by 37 percent over first quarter 2007 and 10 percent sequentially over fourth quarter 2007."

To be more precise, JDA's software sales were $13.2 million in the Americas region, followed by $4.7 million from the EMEA region (down 13 percent, actually) and $2.1 million in the Asia/Pacific region (up 5 percent). That sales were down so much in Europe even after the inflationary effects of the weak U.S. dollar is significant, and shows that the retail space has its own ups and downs--and ones that JDA has rose time and again.

JDA exited the quarter with $109.7 million in cash after paying off $5.6 billion in debt; the company still has $93.9 million in debt on its books, though.

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