Dip in ERP market hits Baan revenue

Baan blamed restructuring costs and a slump in the ERP sector due to the year 2000 problem for its second-quarter loss and a 59 per cent drop in software licence sales.

The ERP specialist reported a net loss of $9.2m, or $0.04 per share, compared with last year's profit of $17.1m, or $0.08 per share. But revenue plummeted 25 per cent to $172.8m and licence sales plunged to $54m from $65m in the first quarter of the year.

Maintenance and service revenue rose 20 per cent to $118m, while margins in that area rose to 27 per cent from 24 per cent in the first quarter.

Operating expenses and costs fell to $184m from $202m in the first quarter.

Baan's shares closed down 37.5 cents to hover around $13 following the release of the figures.

Jim Mooney, chief financial officer of Baan, said: "The second quarter went as expected and the overall results were in line with investment community expectations. Licence revenue continued to be hit by short-term factors affecting the enterprise applications industry and by the residual impact on sales productivity from the restructuring programme.

"The improvement in our sales structure and our marketing investments make us optimistic that licence revenues will grow in the second half of 1999," he added.