Kenexa is taking a beating on Wall Street today, losing 27 percent of its value as of 2 p.m. Eastern time, following an announcement Wednesday by the talent management software vendor that economic conditions are slowing corporate HR buying.
The company’s stock was off $5.89 as of 2 p.m. EDT, selling for $16.14 as buyers reacted to the company cutting its earnings estimate by 9 cents a share. Previously, Kenexa said it expected to earn $1.52 to $1.55 per share for the year. Wednesday, it told analysts and investors it would be in the range of $1.43 to $1.46.
“The macroeconomic environment continues to be challenging, and as a result we have seen an increased number of project implementations that have slowed or been delayed,” said Rudy Karsan, Kenexa’s CEO, in a prepared statement, released prior to a conference call with analysts that was held after the market closed Wednesday.
He also attributed part of the reduction to the changing exchange rate. “The strengthening of the U.S. dollar since the end of the second quarter has created an additional headwind considering the fact that international operations are the fastest growing segment of Kenexa’s overall business,” Karsan added. The company opened an office in India this year and has an office in London. It is headquartered in Wayne, Pennsylvania.
For the third quarter of the year, which ends Sept. 30, Kenexa expects revenue of $54 to $56 million, operating income of $10.3 to $10.6 million, and per share income of 35 to 36 cents. This is a reduction from the previous revenue estimate of $57 million to $59 million, operating income of $11.4 million to $11.8 million, and per share earnings of 38 to 39 cents.