Salary.com tumbles on 4Q loss and new investments
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(AP) - Shares of Salary.com Inc. plunged Thursday after the software maker reported disappointing fiscal fourth-quarter results, gave a weak first-quarter forecast and shifted its business strategy.
Late Wednesday, the Waltham, Mass., company reported a larger-than-expected fiscal fourth-quarter loss on lower than expected sales and forecast fiscal first-quarter revenue below Wall Street expectations.
Shares tumbled $1.91, or 31 percent, to $4.31 in afternoon trading, having fallen to $3.88 earlier in the sesssion, its lowest price since its initial public offering opened Feb. 15 at $13.50.
The company also said it plans to "significantly increase" its sales and marketing spending in fiscal 2009, which will lead to larger losses. Ultimately the company said the investments will lead to a profit in fiscal 2011 and revenue of $65 million to $72 million.
In fiscal 2009, the company expects to lose between $22 million and $25 million, excluding one-time costs.
The company also changed chief financial officers, replacing Chris Power with Bryce Chicoyne. The company said there were "no known disagreements with Mr. Power on any matters relating to Salary.com's operations, policies or practices."
Power became CFO in January.
Analysts from Needham & Co., Pacific Crest and Wachovia downgraded the stock to the equivalent of "Hold" from "Buy" on the news. Philip Rueppel of Wachovia said the change in strategy is risky, and it will take at least two or three quarters before the results are apparent.