Back in early July, enterprise software company Compuware
According to last week's earnings announcement, Compuware's fiscal first-quarter revenue fell 5.7% to $279.4 million, and license revenue was off 29% to $47.2 million. License revenue is critical, since it generally leads to ongoing maintenance and service fees.
Net income was breakeven, and cash flows from operations came to $37.8 million. The company has about $339.4 million in the bank.
One bright spot is Compuware's Covisint division, which helps manage supply chains for customers such as General Motors
But as Compuware's CEO, Peter Karmanos Jr., said on the conference call, the sales team "faces a serious sales-execution problem." He even apologized to his shareholders. While he plans to attack the problem quickly, the solution will be far from easy. It often takes nine months to get a sales force productive.
In the meantime, rivals such as IBM
As I noted in an earlier column, there was a good amount of buyout buzz recently surrounding Compuware. And a deal may eventually happen. But in light of the problems at the company, there probably won't be much of a premium.
Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares of companies mentioned in this article. He is currently ranked 1,590 out of more than 60,000 participants in Motley Fool CAPS.