Veritas shares crash after profit warning

Shares of storage software provider Veritas took a hammering yesterday, falling 36 percent after the company warned that its second quarter earnings would fall well below analysts' expectations.

The shares opened on the New York Stock Exchange at US$26.55, but had plummeted $9.55 to close at $17.

Veritas Software said it now expected to post earnings of 17 to 19 cents a share on revenue of $475 to $485 million for the second quarter ended June 30. This was well below the figures anticipated by analysts, of 24 cents a share on overall revenue of $501 million.

The company has blamed dismal U.S. sales on the earnings shortfall.

"Our anticipated results were impacted primarily by weakness in our US enterprise sales," said Gary Bloom, chairman, president and CEO, Veritas Software. "As we have indicated previously, software license orders are generally concentrated in the later part of the third month of the quarter. At the end of the June quarter, our anticipated order flow weakened, contributing to lower-than-expected license revenues. Our services business remained strong, driven primarily by healthy maintenance renewals throughout the quarter, and the demand for our products and services in most of Europe and Asia Pacific met our expectations."

It is the second time this year that Veritas' financial results have come sharply into the public focus, following an announcement by the company earlier this year that it was going to restate its results for the past three years after it discovered a series of accounting errors that took place under its former CFO.

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