Platinum Software’s Stock Plunges 24% After News of Shortfall in Earnings

Wall Street beat up on Platinum Software Corp. on Monday, knocking the company’s stock price down 24% after the software developer said its projected quarterly earnings turned into a loss.

The Irvine company’s news, which also included cancellation of a contract and difficulties in closing other deals, led to heavy trading on the Nasdaq market that dropped the stock price to $12.50 a share, down $3.875 from Friday’s close.

Platinum, which makes financial and management information software, acknowledged that both its quarterly earnings and revenue fell short of expectations, even though revenue more than doubled.

The company said one-time acquisition costs of $8.2 million caused it to post a loss of $7.1 million, or 57 cents a share, for its second fiscal quarter, which ended Dec. 31. The company had earned $674,000, or 7 cents a share, for the same period a year earlier. Three-month revenue more than doubled to $17.2 million from $7.6 million.

The costs of acquiring Lotzof & Associates, a privately held systems integration and software development firm in Chicago, also contributed to Platinum’s loss of $5.6 million, or 45 cents a share, for its fiscal first half. For the same period a year earlier, the company had a profit of $937,000, or 10 cents a share. Six-month revenue was $32.8 million, up from $13.5 million.