• The Four Hundred
  • Subscribe
  • Media Kit
  • Contributors
  • About Us
  • Contact
Menu
  • The Four Hundred
  • Subscribe
  • Media Kit
  • Contributors
  • About Us
  • Contact
  • Lawson Boosts Profits Even as Economic Meltdown Bites

    July 13, 2009 Timothy Prickett Morgan

    It is not an easy time to be selling application software and implementation services to IT shops right now, which are hunkered down awaiting the economic storm to die down so they can get back to sailing. Lawson Software, one of the key players in the Power Systems i platform, reported its fourth quarter and year end financial results for fiscal 2009 last week, and the numbers could have been worse.

    For the fourth quarter ended May 31, total revenues at Lawson dropped by 20 percent to $186.2 million, but the company was quick to point out that at constant currency (meaning, looking at deals as done in their local currencies, not brought back to the United States and converted to dollars for the official bookkeeping), sales only fell by 11 percent. In the quarter, Lawson’s software license sales fell by 19 percent to $33.6 million. Maintenance revenues, the gift that keeps on giving in the software business, accounted for $85.2 million in sales in Lawson’s Q4, down 4 percent as reported but actually up 4 percent at constant currency. Consulting revenues, thanks to the rotten economy, plummeted by 34 percent to $67.4 million as companies slammed on the spending brakes in the fiscal quarter. (Consulting fees were down 25 percent even when looking through the more rose-colored constant currency glasses.)

    Having already done layoffs back in December when the economic meltdown was in full swing, Lawson started benefiting from those cuts in this quarter. Thanks to cost-cutting and lower taxes, it was able to bring $9.85 million in net income to the bottom line in fiscal Q4, which was 168 percent more than the $3.68 million it booked in the year-ago quarter.

    For the full fiscal 2009 year, Lawson’s software license sales were down by 17 percent to $109.7 million, maintenance fees were up by 4 percent to $350.2 million, and consulting fees fell by 22 percent to $297.4 million. (I guess we all know now why Lawson was so keen on buying rival Intentia International. Maintenance revenue is a ballast in an economic storm.) Net income for the fiscal year rose by 38 percent to $18.9 million, which is a lot better growth than a lot of other application software companies are showing, but then again, Lawson is doing better against some pretty easy compares.

    Based on currency exchange rates that were prevailing at the end of June, Lawson expects that it will have revenues of between $160 million and $165 million in its first quarter of fiscal 2010 ended on August 30, with earnings per share of between 1 cents and 3 cents, which works out to somewhere between $1.64 million and $4.92 million in net income, if Lawson doesn’t buy back a lot of its shares. In the first quarter of fiscal 2009 a year ago, Lawson had sales of $190.9 million, but lost $2.52 million. Being able to profit with such a big decline (about 15 percent at the midpoint of Q1 fiscal 2010 projections) is something that won’t make Wall Street or customers ecstatic, but both would rather have Lawson steering its way through this storm than not. Lawson has $414.8 million in cash and equivalents on hand, $279 million in deferred revenues, and $247.9 million in long-term debt.

    There are worse positions to be in. For sure. But the economy is not behaving, and that’s why Lawson didn’t feel confident enough last week to provide any kind of guidance for all of fiscal 2010.

    RELATED STORIES

    Lawson Retrenches as it Reconnects with Customers

    Lawson Sways BPCS Consultancy to M3’s Reseller Rolls

    Lawson Ekes Out Profit in Q3, Partners to Peddle in Quebec

    Lawson Debuts Another M3 BI Tool

    Lawson Sales Hit by Economic Downturn in Fiscal Q2

    Lawson Cuts Jobs to Get Costs in Line with Sales

    Net Loss Clouds Lawson’s Q1 Report

    Lawson’s Q4 Profits Slammed by Investment Writeoffs, Sales Up Though

    New Customer Sales Pump Up Lawson Software’s Q3

    Lawson Debuts New Offerings at User Conference

    Lawson Updates ERP, Unveils SaaS Plans at User Conference



                         Post this story to del.icio.us
                   Post this story to Digg
        Post this story to Slashdot

    Share this:

    • Reddit
    • Facebook
    • LinkedIn
    • Twitter
    • Email

    Tags: Tags: mtfh_rc, Volume 18, Number 26 -- July 13, 2009

    Sponsored by
    Focal Point Solutions Group

    A CloudSAFE Company

    The Power of Services:
    IBM Cloud and Managed Solutions

    Upgrade your business processes, and save time and resources with specialized, best-in-class IT solutions.

    Managed, Cloud, and Custom Solutions

    Managed Services

    • Infrastructure Monitoring & Management
    • Server Patching
    • Application Patching
    • Managed Backup
    • High Availability/Disaster Recovery Monitoring
    • Cloud Environment Monitoring
    • Office 365 Management
    • Endpoint Management
    • Managed Colocation

    Cloud Infrastructure

    • IBM i Private Cloud
    • IBM AIX Private Cloud
    • VMware Private Cloud
    • VMware Cloud Director
    • Multi-Tenant Cloud
    • Desktop as a Service

    Data Protection & High Availability

    • Disaster Recovery as a Service
    • Backup as a Service
    • IBM i Vaulting

    Security

    • Security Consulting
    • Remote Security Awareness Training & Education
    • Onsite Security Awareness Training & Education
    • Phishing Tests
    • Penetration Tests
    • Mail Security
    • Managed Detection & Response
    • Managed Firewall
    • Endpoint Protection
    • Vulnerability Management
    • Vendor Risk Assessments
    • Security Risk Assessments

    Professional Services

    • Server Virtualization
    • Data & Infrastructure Migrations
    • Hardware & Software Installation
    • Microsoft Office 365 Implementation & Migration
    • Infrastructure Assessments
    • IBM i Consulting
    • IBM AIX Consulting

    Focal Point provides all the tools you need to protect your data, ensure the integrity of your IT infrastructure, and keep your business running.

    Contact Focal Point to Learn More About Our IBM Solutions and Partnerships

    Follow us on LinkedIn

    focalpointsg.com

    Share this:

    • Reddit
    • Facebook
    • LinkedIn
    • Twitter
    • Email

    Admin Alert: Fine Tuning User Access with Application Administration Cicero Evolves Application Integration through Desktop Automation

    Leave a Reply Cancel reply

TFH Volume: 18 Issue: 26

This Issue Sponsored By

    Table of Contents

    • IBM Touts Power Systems Prowess on SAP Tests
    • IBM Indeed Relaunches Tweaked Power Systems Deal
    • Focus on Data Management with App Modernization Projects
    • As I See It: The Green Gap
    • Gartner, Forrester Chop IT Spending Forecasts Again
    • 2008 Pretty Good for Application Software; 2009, Not So Much
    • EGL Free: More Data, Tool Expected This Summer
    • Lawson Boosts Profits Even as Economic Meltdown Bites
    • Valid Tech Names Pat Botz Its President
    • COMMON 2010: Bring Your Own Booze (And I Will)

    Content archive

    • The Four Hundred
    • Four Hundred Stuff
    • Four Hundred Guru

    Recent Posts

    • IBM i Development and Modernization is Getting A Fresche Start with Some Ground-Breaking Subscriptions
    • CloudSAFE And Focal Point Solutions Group Combine Services, Unify Brands
    • Guru: Partitioning Result Sets Using SQL
    • As I See It: Elusive Connections
    • IBM i PTF Guide, Volume 25, Number 47
    • AWS Inks Deal With Connectria To Have a Power Play
    • IBM i Shops Have Alternatives to Db2 Web Query
    • Eradani Lays Waste to API Payload Restrictions
    • Four Hundred Monitor, November 15
    • Old PHP and Other PASE Apps Break on IBM i 7.5

    Subscribe

    To get news from IT Jungle sent to your inbox every week, subscribe to our newsletter.

    Pages

    • About Us
    • Contact
    • Contributors
    • Four Hundred Monitor
    • IBM i PTF Guide
    • Media Kit
    • Subscribe

    Search

    Copyright © 2023 IT Jungle