Isn’t that kind of freaky?
Well, it certainly was for investors. Unfortunately, the company said revenues will be awful for the third quarter. The new guidance is $58 million to $60 million, which is below Wall Street’s expectation of $84 million.
Another big problem: license revenue is forecasted to fall by 15%. This is always a big risk factor for software companies.
MSC.Software has been developing simulation software for over 40 years. The software does things such as help engineers model products, systems and components. MSC.Software’s customers are concentrated in three main sectors: aerospace, autos and heavy machinery.
In the third quarter, MSC.Software suffered from difficulties in closing a variety of million-dollar contracts. It looks like these pending deals will be pushed into the fourth quarter.
MSC.Software did recently strike a strategic alliance with IBM (NYSE: IBM). This deal is apparently resulting in a stronger customer pipeline -- as well as higher-priced contracts.
Basically, for 2006, the company is in a transition. But with its new product launches and relationship with IBM, 2007 could be a year for growth.