PDA Holds Up on Shipments Bound for IBM Computers
PDA Engineering said Thursday that it has temporarily halted shipments of PATRAN software for IBM computers a move that analysts predict will cost $700,000 to $800,000 in third-quarter revenues.
The Costa Mesa software design company said that shipments will be stopped--ideally for only a few weeks--while PDA develops software to overcome “technical problems” that have surfaced with the product.
PDA’s president, John E. McDonald, said some customers have found the software for IBM mainframes “slow and difficult to use.” The company has sold about 16 units of the new product since it was introduced last December.
The IBM line is only one of 11 brands of PATRAN software, which PDA introduced six years ago. PATRAN software--which is used in computer analysis of new products--now makes up about 65% of PDA’s business. Only the software compatible with IBM mainframes is affected by the halt in shipping, McDonald said.
McDonald downplayed the impact of the company’s action, saying that software for IBM computers now makes up only a very small fraction of PDA’s profits.
But he conceded that the shipment deferrals will lower revenues and earnings--probably by a few cents per share--for the fiscal 1987 third quarter, which ends March 31.
For its fiscal year ended June 30, PDA’s net income was $1.4 million on annual revenue of $17.4 million. For the most recent second quarter of fiscal 1987, PDA posted net earnings of $385,000, a 17% drop from $464,000 posted a year ago.
McDonald said that PDA hopes to ship software by April that will solve the problems for IBM computers, and added that software for IBMs could “easily become a third to half” of PDA’s software business.
On Thursday, analysts agreed that the shipment deferrals are unlikely to have much long-term impact.
Peter D. Schleider, a senior vice president in New York with L.F. Rothschild, predicted that missed shipments this quarter will put a $700,000 to $800,000 dent in third-quarter revenues. But he added that he expects “a pretty substantial increase” in PDA’s revenues by the fourth quarter.
