2017-07-21 11:48:02 | Manhattan Associates falls after cutting view amid retail headwindsShares of Manhattan Associates (MANH) fell in late morning trading after the company reported earning results for the second fiscal quarter and lowered its guidance for fiscal year 2017. EARNINGS: After the market close on Thursday, Manhattan Associates reported second quarter earnings per share of 50c on revenue of $154.1M, compared to analyst estimates of 48c and 154M, respectively. The company reported consulting services revenue of $80.9M down 7%, but license revenue growth up 9% over the prior year for the quarter totaling $22.4M. GUIDANCE: Manhattan Associates lowered its full year total revenue guidance to $590M-$600M from $606M-$620M. The company also lowered its guidance range for adjusted EPS to $1.85-$1.89, down from $1.89-$1.93. The guidance compares to analyst estimates of $611.16M in revenue and $1.90 for EPS. In addition, the company estimates Q3 services revenue to be down about 2% and a sequential decline in services revenue of roughly 3% from Q3 to Q4. MANAGEMENT COMMENTARY: "While it will take time to build subscription revenue, we are factoring in potential second half impact on our revenue and earnings based on positive customer interest in pipeline activity," CFO Dennis Story said. "The top end of our guidance range for revenue and earnings assumes performance is weighted to our traditional on-prem business with license maintenance and services and the low-end assumes the positive impact of uptick on our cloud solutions with ratable revenue recognition and potential services revenue deferral until customer go live with recognition over the remaining term of the customer contract." President and CEO Eddie Capel added, "While the global and retail macroeconomic condition certainly give us reason to be cautious, we're very bullish on the market opportunity ahead of us and investing significant energy and capital into innovation and advancing the world's leading suite of supply-chain commerce solutions so as to extend our market leadership in 2017 and beyond." ANALYST VIEW: Benchmark analyst Mark Schappel kept a Hold rating on the stock with a price target of $48 saying while he believes the company's applications are part of the longer-term solution to assist traditional retailers compete with emerging online rivals, he sees few near-term catalysts until retailers rethink their supply chain projects and become more urgent with technology deployments. PRICE ACTION: Manhattan Associates dropped 9.2% to $43.08 in morning trading. |
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