SCIENCE / TECHNOLOGY : FileNet Blames Delays for Revenues, Earnings Falling Below Expectations

By Compiled by David Olmos, Times staff writer

Oct. 3, 1989 12 AM PT

Blaming administrative and customer delays, FileNet Corp. said Monday that its revenues and earnings for the third quarter will be considerably below Wall Street estimates.

And Wall Street didn’t like the news from the Costa Mesa manufacturer of computerized document storage and retrieval systems. FileNet’s stock fell 17.3% to $10.75 per share, down $2.25.

Securities analysts had generally expected FileNet to report a healthy profit for the quarter ended Sept. 30 and earnings per share of between 19 cents and 26 cents. But the company said Monday that it will report a barely profitable quarter and per-share earnings of about 1 cent.

Analysts had also been predicting quarterly revenues to come in at $22.5 million to $23.5 million, but FileNet said revenue will only be about $18.5 million.

Despite the lower-than-expected financial results, FileNet still expects a stronger quarter than a year ago, when it reported a loss of 22 cents per share and revenues of $12.6 million.

Ted Smith, FileNet chairman and chief executive, said delays in concluding contract negotiations with several customers, as well as delays in the completion of several orders from some major customers during the quarter, were the primary reasons for the shortfall.

FileNet said it expects to release final quarterly results by Oct. 23.