Just one day after J.D.Edwards made available J.D.Edwards 5, the company breathed some more life into the CRM industry by posting better-than-expected quarterly results and forecasted strong software sales in the current quarter.
The news sent the company's stock price jumping to more than 18 percent Thursday to a high of $12.45, up $1.96, in early morning trading.
"J.D Edwards' fiscal second-quarter results were very strong in an application-spending environment that remains unpredictable and challenging," Credit Suisse First Boston analyst Brent Thill said in a research note. He reiterated a "buy" rating on the stock.
For its second quarter, J.D. Edwards posted a profit of $3.5 million, or 3 cents a share, compared with a loss of $7.5 million, or 7 cents a share, for the year earlier period. Year over year revenue rose to $223.6 million from $221.9 million.
Plus, at a time when many top CRM vendors including PeopleSoft, Siebel and Pivotal are experiencing a slowdown in licensing revenue, J.D. Edwards forecast software license revenue of $58 million for the third quarter, up from both second quarter and a year earlier.
The surprising numbers come on the heals of its J.D. Edwards 5 release earlier this week, which includes ERP; supply chain management (SCM); customer relationship management (CRM); Supplier relationship management (SRM); business intelligence (BI); collaboration and integration; and tools and technology.
Hank Bonde, chief operating officer at J.D. Edwards, says the new release is more than a re-bundling of old and new products. "First, it clearly is a way of organizing packaging and delivering the products and services that aligns with what our clients are telling us," says Bonde. "It's also an innovative architecture, Web services-oriented, that allows us to build and deliver and implement software in a much easier way for customers. Third, it's a new set of product functionality that makes customers even stronger. Trust me, it's not just a package."
The product set is backed with a clearer message and a better business model for the company, says AMR Research Senior Vice President Jim Shepherd. "J.D. Edwards has a long tradition of wonderful relationships with customers, but rarely sold them anything additional," he says. "As they added new capabilities and features, they basically gave it to the customer base. It's a lovely thing to do but not necessarily good business."
Also, key acquisitions of Numetrix (SCM) and YOUcentric (CRM) give J.D. Edwards a more appropriate range of products than earlier partnerships with best-of-breed vendors like Siebel and Ariba provided. "More important than matching function for function is to have a product that makes sense for their base," says Shepherd. "That's what they did the second time around."
The company's latest release includes the introduction of its next version of its implementation methodology, "OneMethodology," which offers customers an integrated set of consulting and education services based on their specific business and implementation needs. "With OneMethodology, we enable the delivery of predictable, on-time, on-budget implementations that enhances each of our customers' unique way of doing business," said Bob Dutkowsky, chairman, president, and chief executive officer, J.D. Edwards in a statement.