ACI Worldwide Inc., a New York developer of payments software, reported a second consecutive quarterly loss and sharply reduced its earnings guidance for the year.
In response, investors sold the stock, and analysts expressed disappointment but said the results could improve next year.
ACI said last week that it lost $2.7 million in its fiscal third quarter, which ended June 30, compared with net income of $22.5 million a year earlier.
Revenue grew 15.7%, to $98.1 million. ACI said that $13 million of the increase came from companies it had acquired in the last year, and that $300,000 of the growth was organic.
Mark Vipond, its chief operating officer, told analysts on a conference call that the company's online hosting business had not grown as fast as executives had hoped, though it is now offering its other payment technologies as hosted services.
"Our specific focus for 2007 was to establish that [hosting] business in North America. We will expand that into other regions of the world after we have success here in North America," Mr. Vipond said. "I'm happy to report that this quarter, or the next quarter that we report, we will actually get to announce our first deals in our on-demand" business beyond its Enterprise Banker service. ACI bought P&H Solutions Inc. of Newton, Mass. in October and renamed the former Politzer & Haney Inc. hosted cash management system for corporate banking as Enterprise Banker.
ACI, which offered limited earnings guidance while it was catching up on delinquent reports, said Thursday it expects to report $390 million to $400 million of revenue for this calendar year, down from an earlier projection of $428 million to $447 million. It also slashed its guidance for adjusted non-GAAP earnings per share, to $0.82 to $1.02, from a previous range of $1.51 to $1.80.
The stock fell 11.2% Thursday, to close at $23.51 a share, and was unchanged Friday afternoon.
Thomas McCrohan, an analyst at Janney Montgomery Scott LLC, wrote in a Friday note that ACI had "another disappointing quarter" reflecting sluggish U.S. demand and the weight of its acquisitions.
"It appears the worst is over and the bar has been sufficiently lowered, but it will likely take a few clean quarters to convince some investors this is in fact the case," wrote Mr. McCrohan, who rates the stock a "buy."
Gil B. Luria, an analyst at Wedbush Morgan Securities, wrote that the lowered guidance sets the stage for a turnaround next year.
ACI's "shares have significant upside given accelerating market growth, competitive product set and the fleeting nature of current challenges," wrote Mr. Luria, who has a "buy" rating on the stock.
