Lawson Expects Better Results for Fiscal Q4 Than Anticipated

Published: June 25, 2007

by Timothy Prickett Morgan

There are two times when public companies talk out of turn with Wall Street: when things are going unexpectedly wrong, and when things are going unexpectedly right. ERP software giant and midrange player Lawson Software has sent out a note to Wall Street and to its investors to let them know that its fiscal fourth quarter ended May 31 went better than expected.

Lawson will report its final financial results for the fourth quarter of fiscal 2007 on July 26, but wanted to let everyone know that sales are looking up. In the third quarter, Lawson went into the red, so it is no surprise that the company was eager to get some good news out to help bolster its shares in the wake of last year's acquisition of European ERP software rival Intentia International.

The company's top bean counters said in a statement that its preliminary accounting for the quarter pegged software license sales in Q4 at $37 million to $40 million, and said further that this was due to a normal fourth quarter push by its sales team to close deals and a higher number of closed deals after that push, which was not expected given that Lawson raised prices for its System Foundation product line, which went into effect on June 1. Basically, telling customers that there was an impending price increase was the real driver. (This begs the question of how Lawson will do in future quarters, but let's not get too far ahead of ourselves.) Lawson also said that worldwide sales for software, maintenance, and services would come to between $201 million to $208 million, and that profits will exceed prior guidance given for the quarter by about 2 cents per share. Back in April, Lawson provided Wall Street with guidance for Q4 and said that sales would be between $187 million and $195 million, and said further that earnings would be lower than expected in the quarter because of the restructuring charges related to the Intentia acquisition. The increase in sales in Q4 seems to have compensated for the restructuring charges, based on this initial data.

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