Friday, July 21, 2006

Manhattan Associate Posts Strong Quarter. The Pressure Is On. (AMR)

Manhattan Associates (MANH) reported strong 2Q06 results, posting a record $78M in consolidated revenue. Earnings per share rose by 37% to $0.34 year to year. These numbers far exceeded consensus projections of $69M in revenue and 27 cents in earnings per share. Its strong 2Q06 results position it to meet full-year guidance after its 1Q06 miss.

Manhattan and competitor RedPrairie are under intense pressure from the ERP vendors, especially Oracle (ORCL) and SAP (SAP). Buyers for new business have to prove to their executive management why they can’t use the equivalent products from Oracle or SAP, and have to go beyond them. Oracle and SAP are investing in warehouse and overall SCE space, as evidenced by Oracle’s 2005 purchase of G-Log. And because SAP and Oracle are extremely well funded and their customer adoption rates are high, the ramp to parity is faster.

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