Netegrity Inc. on Monday said it will post a loss of at least $9 million when it reports second-quarter earnings later this month. The company blamed sluggish technology spending for the shortfall.
Netegritys stock took a hard hit as a result of the news, falling more than 56 percent to $2.71 by 2 p.m. EDT.
Netegrity, based in Waltham, Mass., makes software for securing e-business applications and portals and is one of the main players in the single sign-on market.
Many security vendors were counting on the widely anticipated boom in security spending following the terrorist attacks last fall. That spike never materialized, and like the rest of the technology sector, many security vendors have been struggling to regain their footing.
"Constrained IT spending continues to adversely impact the enterprise software market, and in this past quarter, Netegrity was affected by this industry-wide phenomenon more profoundly than ever before," said Barry Bycoff, Netegritys CEO.
Netegrity said the company will report a net loss between $9 million and $11 million for the second quarter. In the same period a year ago, the company earned $3.1 million.
Revenue for the just-finished quarter is expected to be in the $14.5 million-$16.5 million range, a sharp decline from the second quarter of 2001, when Netegrity brought in $24.7 million in revenue.
The company will report full second-quarter results July 24.
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