Sterling Software Inc has warned that its fiscal fourth quarter earnings won’t make analyst expectations. The company blamed its recent $168m acquisition of Information Advantage Inc, completed last week, for the shortfall. A restructuring of its application management business to integrate the new business hurt its revenue in this area – which accounts for around half of total revenue. Application management revenue is expected to fall compared with revenue in the third quarter. Before acquisition charges, Sterling now expects earnings of $0.47, rather than the $0.52 Wall Street had been expecting. The quarter ends in September. For the year, Sterling expects to still meet its plan, and expects growth in the 20% range year-on-year for revenue and earnings. Sterling said it would repurchase 5 million shares of its common stock because it says it is undervalued.
