Rational Revenues Drop 13 Percent

Officials blame drop in revenues on the struggling economy.

Rational Software Corp., which makes software development tools, reported revenues for the first quarter of $152.5 million, a 13 percent drop from the $175.8 million earned during the same period last year.

In financial statements released Thursday, the Cupertino, Calif., company also reported a net loss of $6.5 million, or $.03 per share, in the quarter ending June 30.

Rational officials laid much of the blame for the drop in revenues on the struggling economy, saying many potential customers—particularly in industries such as telecommunications—are reluctant to start new projects.

Looking forward, Rational officials forecasted revenues between $145 million and $155 million for the second quarter, which ends Sept. 30.

They also expect revenues to be between $625 million and $660 million for the entire fiscal year, which ends March 31, 2003. Those numbers represent a 4 to 9 percent drop from the previous fiscal year, officials said.