Why did Iress Ltd (ASX: IRE) share price plummet by 15%?
Iress Ltd (ASX: IRE), a technology company that provides software for financial services firms, experienced a significant drop in its share price by 15. 21% to $8. 92. The sharp decline follows the recent announcement by the company that it was downgrading its profit forecast.
Delayed sales conversion and unfavourable currency exchange to blame
Iress cites challenging market conditions as the reason behind the timing delays in the conversion of new sales opportunities. Additionally, unfavourable currency exchange movements and US dollar pricing have contributed to higher-than-anticipated supplier costs.
Revised profit forecast
As a result of these challenges, the company now projects full-year segment profit for 2022 to be in the range of $166 million and $170 million, on a constant currency basis.
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This new projection is a significant downgrade from the company’s previous guidance in August, in which it had forecasted segment profit to be at the bottom range of $177 million and $183 million.
Impact on net profit after tax (NPAT)
The fall in the segment profit forecast has also impacted Iress' net profit. The company now estimates the NPAT to be between $54 million and $58 million compared to its earlier forecast of $63 million to $72 million.
Iress Ltd's profit downgrade has worried its investors, leading to the sharp plummet in its share price. The company is caught up in a tough business environment, and the current market scenario appears challenging to combat.
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