[BusinessTeam] FT.com News and Analysis World Article.htm

Message-ID: <6B75EF096AE0BE428B8CEDEA89C5F63278239C@exchange01.lab49.com> · Fri Apr 06 14:22:06 2001 UTC

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Autonomy hit by Europe slowdown
By Caroline Daniel in London and Peter Thal Larsen in New York
Published: April 5 2001 21:19GMT | Last Updated: April 6 2001 14:02GMT

 autonomy down
<http://news.ft.com/cgi-bin/gx.cgi/AppLogic+FTBlobServer?blobtable=Image&b
lobcol=urlpicture&blobkey=id&blobwhere=FT365JZO7LC&blobheader=image/jpeg> 

Autonomy, the UK software group, on Thursday said its revenues would be
lower than expected due to a dramatic slowdown in demand in Europe. 

This is the first warning from a high-profile European company attributing
its shortfall to a lower demand in Europe rather than the US, where sales
have already been battered.

The warning, issued after the markets closed in New York on Thursday, came
as a shock to investors. Analysts had warned on Thursday that Autonomy may
have been poised to make a warning because of its exposure to the US. Few
expected the problems to relate to sagging European demand. 

Mike Lynch, chief executive and founder of Autonomy, speaking from New
York, said the company had been taken by surprise by the sudden change in
sentiment in Europe in the last few weeks of March, as companies stalled
spending. 

He said: "Either this turns out to be just a stalling situation. Or, if it
goes the other way [and spending freezes], we have the signs of a global
recession. Large multinationals across all regions have taken radical
steps very quickly." Autonomy said its first-quarter revenues for the
three months to March 31, would now be between $14m-$15m against
expectations of $20m-$24m. 

However, earnings per share would be roughly in line with expectations at
about 4 cents, following foreign exchange gains, reduced costs of
advertising and improved operating margins. 

Mr Lynch said multinationals from all sectors, including food
manufacturers, telecoms, banking and aerospace, had suddenly put projects
on hold. "We had contracts at the point when the only thing left was the
finance director's signature. This is very global. They are freezing
everything." 

Autonomy said its visibility about the rest of the year was very low, and
declined to give estimates. 

Autonomy's comments add to those over the last month from many US
technology companies saying that demand in Europe was softening. Cisco,
the networking giant, and Hewlett Packard, the PC maker, have been among
those issuing warning. 

The revenue warning comes as Autonomy's shares have touched all time lows
this week. The shares remained under pressure on Thursday as Goldman Sachs
and UBS Warburg questioned Autonomy's ability to withstand the US
slowdown. In the fourth quarter, 44 per cent of its revenues came from the
US. 

Autonomy said it had already changed the way it marketed its knowledge
management software in the US in response to the slowdown there. It now
emphasises the software's ability to cut costs, by automating functions,
such as putting tags on a documents making them easier to trace. The
company now intends to do the same for Europe. 

more from FT.com

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3Q0OOZ6LC&
live=true> Autonomy hit by European slowdown

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3N5TKK7LC&
live=true> Analysis: Bundles of bad news

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3Q7OJV6LC&
live=true&tagid=ZZZC00L1B0C&subheading=information technology> Goldman
downgrades Autonomy earnings estimate

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3EQ8DCUJC&
live=true&tagid=YYY9BSINKTM&useoverridetemplate=IXLZHNNP94C> Autonomy to
exit FTSE 100 March 2 2001

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3XP2J7NJC&
live=true&tagid=YYY9BSINKTM&useoverridetemplate=IXLZHNNP94C> Software
star's party is over February 25 2001

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3GB0J7NJC&
live=true&tagid=YYY9BSINKTM&useoverridetemplate=IXLZHNNP94C> Autonomy
faces more scrutiny February 25 2001

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3Q93K2JJC&
live=true&tagid=YYY9BSINKTM&useoverridetemplate=IXLZHNNP94C> Apax quits
Autonomy February 23 2001

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT31PRJHXIC&
live=true&tagid=YYY9BSINKTM&useoverridetemplate=IXLZHNNP94C> Autonomy
criticises Merrill February 7 2001

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3PQ96E1IC&
live=true&tagid=YYY9BSINKTM&useoverridetemplate=IXLZHNNP94C> Ericsson
adopts Autonomy technology January 16 2001
 <http://tv.ft.com/rams/2001/clips/b060401e.ram> Video: Autonomy shares
suffer on warning

<http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3Q0OOZ6LC&
live=true&useoverridetemplate=IXL8L4VRRBC&tagid=ZZZAU2EX70C> 

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