Since the mid-1970s, Lawson (NASDAQ:LWSN) has developed enterprise resource planning software, which helps companies with inventory, human resources, procurement, and other tasks. To deal with the intense competition from companies like SAP (NYSE:SAP), Microsoft (NASDAQ:MSFT), and Oracle (NASDAQ:ORCL), Lawson struck a big deal last year, issuing 47% of its shares to merge with Intentia International AB (valued at $425 million). The rationale: to expand the customer base by selling enterprise software to manufacturing businesses, as well as to capture markets in Europe and Asia. Unfortunately, so far the results have been so-so and the stock price has languished -- a situation that is likely to continue for some time.

In the fiscal second quarter, revenues increased 107% to $184.5 million (a big boost came from the Intentia deal). The was a net loss of $3.5 million, or $0.02 per share, which compares to net income of $6.6 million, or $0.06 per share, in the same period a year ago. Basically, Lawson had a myriad of post-acquisition expenses.

Revenues could have been higher, but it seems Lawson is having troubles with its sales force's ability to close contracts. This is nothing new in the software industry; then again, solving such issues is usually no easy task.

Going forward, management forecasts a fiscal third quarter net loss of $0.01 to break even. Revenues are expected to range from $181 million to $189 million.

Lawson is continuing to deal with the huge challenges of merging with a large foreign company (Intentia is based in Europe). Besides cultural differences, there are the complexities of managing two technology platforms.

True, Lawson is selling at 1.3 times its enterprise value, which is a cheap valuation in the software industry. But investors want to see the company get more traction from the Intentia deal -- which, as indicated on the conference call, could easily take the rest of 2007.

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Fool contributor Tom Taulli does not own shares mentioned in this article. He is currently ranked 328 out of 17,523 in Motley Fool CAPS.