Software Spectrum Earnings Off
Software Spectrum Inc., which acquired Egghead Software’s corporate, government and education division earlier this year, enjoyed record sales during its third quarter, but struggled to produce a profit for the period.
Company officials say a year of acquisitions and expenses in absorbing those acquisitions cut heavily into corporate profits.
Dallas-based Software Spectrum produced net income of $833,000 for the quarter ended Dec. 31, or 19 cents per share, on sales of $240 million.
That compares with income of $2.8 million, or 65 cents per share, on sales of $118 million for the same quarter a year ago.
For the nine months ended Dec. 31, the company earned $44,000, or 1 cent per share, on sales of $583 million. That compares with net income of $6.2 million, or $1.45 cents per share, on sales of $299 million during the first nine months of the previous fiscal year.
An operating loss of $1.8 million in the company’s Asia/Pacific operations damaged Software Spectrum’s third-quarter performance, company officials said.
When the company announced on Jan. 28 its expectation that third-quarter earnings would be well below analysts’ expectations, its stock plunged from $33.50 to $23 in a single day. The stock continues to trade around the $23 level.
“The first nine months of this fiscal year have been some of the most important in our company’s history,” Judy Sims, Software Spectrum’s chief executive officer, said in a news release Friday. “We doubled our size in North America through a successfully integrated acquisition and completed our vision of establishing global operations.
“Our target was to return to profitability in the (third) quarter, so we are pleased to have accomplished that on the strength of record sales.”
Sims said the company is accelerating its efforts to restructure its recently acquired Asia/Pacific operations “to more closely mirror our North American structure.”
Software Spectrum is the leading worldwide supplier of microcomputer software and technology services to organizations.
It operates a customer service center and technical support call center in Spokane, employing about 250 people here.
, DataTimes