Portal posts Q1 net loss of $47 million

(Telephony) Portal Software posted a net loss for first quarter 2002 of $46.8 million, or 28 cents per share, compared with net income year over year of $3.1 million, or 2 cents per share.

Revenues for the quarter totaled $44.6 million, down $6 million from the same period last year. Portal also reported a pro forma net loss of $30.6 million or 18 cents per share, which excludes amortization of goodwill and developed technology related to the November 2000 acquisition of Solution42.

“The current economic environment is affecting everyone’s business,” said John Little, CEO of Portal, during the company’s Web cast yesterday.

As a result, Portal plans on cutting costs for the second quarter by 20% to 25% through workforce layoffs, the consolidation of facilities and asset write-offs. The company foresees incurring a restructuring charge linked with these reductions in the quarter ending July 31.

Despite the sharp decline in revenue and earnings, Portal reported several customer wins for the quarter in the service provider markets:

· China Mobile licensed Portal’s Infranet solution to support its Wireless Application Protocol (WAP), GPRS and next generation services;

· Time Warner Cable chose Infranet to support its multiple ISP choice and billing for broadband cable services; and

· Norway’s Telenor will use Infranet to support its outsourced messaging service.

Portal also announced alliances with Siebel Systems and IBM during the first quarter. Portal and IBM plan to create a carrier-grade third generation (3G) infrastructure solution for wireless operations, while Portal and Siebel aligned to create and eBusiness billing solution for communications service providers. In addition, Portal announced an OEM agreement with Nokia to support WAP, GPRS and 3G services.

Little maintained during the Web cast that Portal would keep its leadership position in the infrastructure software space, though its financial future will be hard to project. “The rest of the year is strongly dependent on the overall economic conditions,” Little said. “We see enough business in the pipeline to meet second quarter projections, but the rest of the year is uncertain.”