Veritas shares plunge on Q2 profits warning

Citing weakness in US sales, Veritas warned on Tuesday that its second quarter earnings will come in lower than anticipated.

The company, which makes storage management software, announced that preliminary figures for the second quarter, which ended on Wednesday, show that revenue will be in the range of $475m to $485m. Earnings for the period, excluding costs such as amortisation, will be between 18 cents and 20 cents per share, the company said.

A consensus of analysts surveyed by First Call had expected earnings of 24 cents per share for the quarter. Revenue was expected to be about $500m.

Veritas' stock price was down 24.6 per cent to $20.02 on Tuesday morning, from $26.55 at the end of Friday. The company has scheduled an earnings call for 27 July.

In a statement, Veritas CEO Gary Bloom said the earnings shortfall is due to poor sales to corporations in the US. "At the end of the June quarter, our anticipated order flow weakened, contributing to lower-than-expected licence revenues," Bloom said.

Licence revenue for the quarter will be between $263m and $273m. Bloom said services revenue remained strong at $212m for the quarter.

Martin LaMonica writes for CNET News.com.