Fundtech warns on Q4 delays as global banks stall on contracts

Fundtech warns on Q4 delays as global banks stall on contracts

US financial systems software house Fundtech has missed consensus estimates for revenues and income in the third quarter and warned of delays in the fourth quarter as bank clients stall on closing deals.

Fundtech posted quarterly revenues of $31.5 million, an 18% increase year-over-year, but marginally shy of $31.8 million consensus forecasts. The company reported net income of $1.5 million for the third quarter of 2008 compared with net income of $2.2 million in the comparable year-earlier period.

Depressed markets among banking clients are likely to hit the company's fourth quarter results warned CEO Reuven Ben Menachem: "We are expecting some delays in the fourth quarter in closing new bookings with several global bank customers who are impacted by the unsettled macro economic conditions."

Full-year and Q4 guidance has been marked down accordingly. The company now sees EPS in the range $0.00-$0.06 for Q4 against a $0.27 consensus, and revenues of $29.5-$30.5 million versus the $33.74 million consensus forecast. For the full year, EPS has been adjusted to $0.47-$0.53 against $0.75 consensus, and FY08 revenues marked down to $120.7-$121.7 million from $125.17 million consensus.

Says Menachem: "Looking towards next year, we believe that we have a healthy pipeline of Global PAYplus deals that will offset any potential decline in revenues from our existing global bank customers. In addition I believe many of our other product lines will continue to grow in 2009 and beyond."

Shares in the vendor moved down 12.4% to $8.08 in early trading.

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