Art Technology Group (Nasdaq: ARTG) fell US$4.25 to $7.75 in morning trading Monday, after the e-commerce software maker said that it expects a wider loss for the first quarter ended March 31st as customers cut back on technology spending.
While revenue for the quarter likely rose to $40 million to $42 million from $21.6 million a year earlier, the Cambridge, Massachusetts software developer said it probably lost 19 to 22 cents per share, compared with a loss of a penny per share in the same period last year.
Analysts had expected the company to post a profit of about 10 cents per share in the quarter just ended.
“Toward the end of the first quarter, we saw large enterprise customers across many vertical industries delay technology purchases due to the current economic environment,” said chief executive officer Jeet Singh. “As a result, multiple large deals that we had expected to finalize very late in the first quarter were not closed.”
Singh said the company is “looking closely at every possible means” of cutting costs.
“We have already suspended hiring in all departments, with the exception of sales, and we have postponed our expansion initiatives for the time being,” he said.
Art Technology said that it will update investors on the outlook for the rest of the year after it revises its operating plan. Current market conditions, the company said, have made previous forecasts “obsolete.”
Art Technology provides e-business services to companies including 3M, AT&T, Blockbuster and Procter & Gamble. The company has offices throughout North America as wellas in Europe, Asia and Australia.