28 Sep 2015

ERoad lowers earnings forecasts as US costs rise, sales slow

2:00 pm on 28 September 2015

Transport software company ERoad has downgraded its earnings forecast, with lower-than-anticipated sales in the United States and higher expansion costs.

It said a decision to accelerate its US-based expansion beyond Oregon had added costs and impacted its US sales forecasts.

US sales contracts were expected to be about half of what it had been forecasting at between 6,000 and 6,500, compared with a forecast of nearly 12,500 for the year ending in March.

However, ERoad said New Zealand and Australian operations are meeting expectations, with annual sales expected to be 10 percent ahead of the year earlier.

ERoad chief executive Steven Newman said the company had accepted slower sales in Oregon in the short term in order to establish sales teams in neighbouring states sooner than anticipated.

Nearly half of ERoad's sales staff are now expected to be located outside Oregon by the end of March.

The company's total sales contracts were down one percent to the end of August compared with last year.