Bottomline Technologies lowers 3Q estimates

A disappointing earnings guidance issued on Wednesday sent Bottomline Technologies stock tumbling.

While the Portsmouth-based producer of automated payroll software and services anticipated profits of about 4 cents to 7 cents a share for the third quarter of 2006, the average forcast had expected earnings of more than twice that amount, according to Reuters.

In addition, Bottomline’s earnings estimate was not done in according to Generally Accepted Accounting Principles (GAAP) that the Securities and Exchange Commission now requires. GAAP earnings are generally lower because they take into account stock options issued to company executives for the first time.

Bottomline’s third quarter estimated earnings also excluded some recent acquisition-related charges and stock compensation expenses.

Bottomline estimates that its quarterly revenue would be between $24.5 million to $25 million. Previous forecasts predicted about $27 million. Actual earnings will be released on May 1, the company said.

The company blamed the shortfall on lower-than-expected software sales and increased expenses for the development of its enterprise payments platform.

The strategy was to convert software sales to a subscription- and transition-based product offering, the company said.

“We are confident that up-front investment in products and delays in revenue recognition from subscription offerings are the right steps for the business and will, in the long-term, drive higher revenues, profits and shareholder value,” said Joe Mullen, CEO of Bottomline Technologies.

Stocks fell from the previous day’s close of $13.59 to as low as $9.92—more than a 20 percent decline—before climbing above $11. —BOB SANDERS