Software vendor and business consultancy Virtusa Corp. sharply lowered its revenue and earnings guidance for the first quarter amid contracting stumbles and a sharp increase in costs.
The Westborough company said Monday that revenue for the quarter ended June 30 likely ranged between $42 million and $42.5 million, well below the $45 million-to-$46 million range predicted in a May filing with the Securities and Exchange Commission.
Virtusa (NASDAQ: VRTU) said its bottom line also landed between 0 cents and 3 cents per diluted share for the three-month period. It had previously predicted earnings in the range of 13 cents to 16 cents per diluted share.
Virtusa, which consults business customers on software optimization and also offers outsourced software services, said the shortfalls were largely due to payment problems stemming from a contract with British Telecommunications plc. The company said work had commenced on several BTC projects during the quarter, but that BTC later notified Virtusa that it lacked the funds to support that work.
We had reason to believe that we would obtain budgetary allocation for certain engagements at BT and, therefore, we commenced work on these projects, said Kris Canekeratne, Virtusa’s chairman and CEO . However, the budget allocations for these projects were not approved.
Virtusa also cited a spike in contract-worker costs and foreign-exchange losses for a rise in expenses that ultimately cut into the quarter’s earnings.
(Boston Business Journal)