Lawson Software, Inc. (LWSN) is expected to report fiscal first quarter results on Sep 30, 2009.
Based in Minnesota, Lawson is a leading provider of enterprise resource planning (ERP) software solutions and professional services to mid-market enterprises in the health care, retail, public and professional service industries.
LWSN expects revenues between $160 million and $165 million in the quarter, down 14% to 16% year over year, as the company expects recessionary conditions to moderate in late 2009 or early 2010. The unfavorable movement in foreign exchange rates is expected to account for half of this decline.
EPS is forecasted around 5 cents. Margins are expected to show improvement in fiscal 2010 due to cost-cutting measures undertaken by management.
The company earlier reported in line results for the fiscal fourth quarter. Business for Lawson continues to be adversely affected by the deteriorating global economy as most customers have tightened their budgets. The slowdown in the economy will continue to affect business in the first quarter, especially the services business. Lawson derives its revenue from software license fees as well as professional services (including consulting, training, and implementation) and customer support and maintenance.
The August quarter is a seasonally slow quarter for the services business due to summer holidays in Europe. The slowdown in the economy compounds the decline in top-line for the first quarter.
Given the consolidation in the industry, potential growth and scale of Lawson's major competitors may make them more formidable. The increased competition from Oracle (NASDAQ:ORCL), SAP, JDA Software (NASDAQ:JDAS), Microsoft (NASDAQ:MSFT) and others is putting pricing pressure on the company. In particular, SAP AG and Oracle Corporation, both being large global ERP vendors, are increasingly targeting mid-sized businesses as their traditional larger-customer market is becoming more mature, which is a threat for the company.