The company reported total revenue of $117.3 million for its third quarter ended Sept. 30, compared with $374.5 million a year ago. Software license revenue was down 35% to $14.2 million, compared with $21.5 million a year ago. Service revenue dropped to $31.8 million from $33.1 million a year ago. I2's net income dropped 79% to $7.2 million, from $34.1 million in the third quarter of 2002.
I2 would have fared worse had it not made deep cuts in its sales and marketing and research and development budgets. The company cut its sales and marketing expenses nearly in half to $20.9 million, compared with $40.8 million a year ago. It spent only $20.3 million on R&D, compared with $45.7 a year ago.
In a written statement, i2 chairman and CEO Sanjiv Sidhu said there are metrics signaling that i2's products and services are strengthening. "These signs indicate that the fourth quarter may be a turning point for i2," he said.
The company is also still enduring a Securities and Exchange Commission investigation of matters relating to a recent restatement of i2's consolidated financial statements. I2 is still delisted from the Nasdaq stock exchange. Last month, the company said it would consider reapplying to Nasdaq at a later time and that it expects its common stock will continue to be quoted in the over-the-counter Pink Sheets for the foreseeable future.