May 6, 2009 / 12:35 PM / 8 years ago

UPDATE 1-Softchoice posts Q1 loss as tech spending drops

* Q1 loss $0.14/shr vs year-ago profit $0.10/shr

* Q1 rev down 27 pct to $218.4 mln

May 6 (Reuters) - Canadian technology services provider Softchoice Corp SO.TO swung to a quarterly loss as technology spending fell sharply.

The company reported a net loss of $2.39 million, or 14 cents a share, for the first quarter, compared with a profit of $1.73 million, or 10 cents a share, a year ago.

Revenue fell 27 percent from a year earlier to $218.4 million, but Softchoice said its gross profit declined only 22 percent due to the relative strength of its business with Microsoft Corp (MSFT.O) business and improved margins.

“In spite of a severe downturn in technology spending in the quarter, our focus on aggressive cost management has allowed us to mitigate our loss during what we expect will be the most difficult period of our fiscal year,” Chief Executive David MacDonald said in a statement.

The company said its cost-cutting moves are expected to save between $3 million and $4 million over the balance of 2009.

Softchoice had total debt of $40.5 million at the end of the quarter, down 62 percent from a year earlier.

Shares of the Toronto-based company closed at C$3.26 on Tuesday on the Toronto Stock Exchange. The shares have fallen more than 77 percent in the past year. (Reporting by Ashutosh Joshi in Bangalore; Editing by Mike Miller)

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