(Reuters) - Parametric Technology Corp PMTC.O, which makes product-design software, lowered its expectations for the second quarter after it failed to close a large contract in Europe, sending its shares down as much as 23 percent.
“Our second-quarter license revenue was impacted by a large transaction in Europe that did not close and lower-than-expected performance in North America,” Chief Executive James Heppelmann said in a statement.
The company, which makes software used to create 3-D computer models for aircraft engines, cars and mobile phones, said it ran into problems late in the second quarter, that led to a shortfall in revenue from licenses.
The European customer had completed negotiations with Parametric and won approval from its board, but a management change within the company reversed the approval process and disrupted closure of the transaction, Parametric said on a conference call.
The deal would have contributed more than $10 million in license revenue in the second quarter, it said.
“We will continue to pursue this deal in the 3rd-qtr, but given the dynamics of the situation, we consider the deal to be at risk,” Heppelman said on the call.
The company, which competes with Austodesk Inc (ADSK.O) and Ansys Inc (ANSS.O), also said its North American business was weaker than it had expected, but added it was more an execution issue and not an indication of lower demand.
For the second quarter, the company now expects a profit of 26 cents to 28 cents a share, excluding one-time items. It expects an adjusted revenue of $300 million.
In January, it had forecast an adjusted profit of 32 cents to 36 cents a share and revenue of $305 million to $320 million.
Shares of the company fell to $21.02 in morning trade on the Nasdaq. The stock has risen 84 percent since its year low in October. It touched a near-11-year high of $28.95 on Monday.
Reporting by Sayantani Ghosh in Bangalore; Editing by Sreejiraj Eluvangal, Supriya Kurane