* Q4 core shr $0.03 vs est $0.04
* Q4 Rev down 1 pct
* Sees Q1 core shr loss $0.01-$0.02
* Sees job cuts in US ops to facilitate transition to India
* Shrs plummet over 23 pct in after-market trading
(Adds conference call details, analyst quote, CEO comments,
By Brenton Cordeiro
BANGALORE, March 15 - Financial technology
provider Online Resources Corp forecast first-quarter
outlook below analysts' estimates, and said it was no longer
looking to sell itself, wiping out nearly a quarter of its
market value in after-hours trade.
"The board determined that the completion of a transaction
on acceptable terms was unlikely at this time," CEO Joseph Cowan
In January, Chantilly, Virginia-based Online Resources said
it was evaluating unsolicited merger offers, but had not
identified the parties that had approached them.
Online Resources' shares fell over 23 percent in
after-market trading touching a low of $4.63. They closed at
$6.05 on Tuesday on Nasdaq.
"Clearly the offers were below what the board considered
reasonable," analyst John Kraft of DA Davidson said.
Online Resources, which had been considered an acquisition
target of late, had seen its stock surge almost 50 percent over
the past 6 months.
The company also forecast flat revenue growth for 2011 and
said it plans to set up a development center in India that will
lead to job cuts in the U.S.
He declined to specify the number of job cuts, but said the
company targeted lowering IT headcount costs by 35 percent by
the end of 2013.
"We're going to transition a lot of our headcount into
India," Cowan told Reuters. "It will take about 18 months to get
up to full force that we want there."
Cowan, who had introduced a long-term strategic growth plan
after he took over as the company's top executive last June,
also said there "may be additional (management) changes as we go
into the future".
The plan includes enhancing its management team and
investing in technology, products and organizational structure
of the company, with a market value of under $200 million,
"The core of the company is really payments, and we've kind
of gotten off-direction from that. We will be refocusing on
that," Cowan said on a post-earnings call.
Online Resources provides services to financial
institutions, which enable those companies to offer services
such as electronic bill payments and fund transfers.
For the first quarter, the company expects core net loss at
between 1-2 cents a share. Analysts were expecting the company
to earn 6 cents.
For the fourth quarter, core net income was 3 cents a share,
compared with Wall Street estimates of 4 cents a share.
(Reporting by Brenton Cordeiro in Bangalore; Editing by Prem
Udayabhanu and Anil D'Silva)