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(Adds analyst's comments, details)
By Purwa Khandelwal
BANGALORE, Dec 17 (Reuters) - ACI Worldwide Inc (ACIW.O) forecast lower fourth-quarter revenue that was well below Wall Street view, citing a decline in capacity revenue and license fees, and said it expects a pretax loss of about $10.4 million.
Shares of the company, which provides software for electronic payment systems, fell more than 18 percent to $19.20 in afternoon trade making them one of the top percentage losers on Nasdaq. They touched a year-low of $17.34 earlier in the session.
"It's tempting to look at the (stock) reaction today as an overreaction, but I think it's a fair reaction based upon the goalpost the management has consistently put in the ground and have missed," Tom McCrohan, a senior analyst with Janney Montgomery Scott, said by phone.
The New York-based company forecast quarterly revenue of about $84.7 million, a decrease of about 4 percent over the year-ago period. Analysts on average were expecting $100.8 million, according to Reuters Estimates.
ACI said it was reviewing certain tax deductions previously taken for fiscals 2004 through 2006 and evaluating the impact to its financial statements.
The company, which competes with S1 Corp SONE.O and Fundtech Ltd FNDT.O, also reported a rise in its 60-month and 12-month backlog.
McCrohan said people could be concerned about how real the backlog was and when the company was going to start converting the supposedly strong backlog into financial results.
Capacity revenue fell 63 percent to $3.1 million, while non-recurring license fees booked nearly halved to $9.5 million.
ACI also said it partnered with IBM (IBM.N) to provide next generation payment technology, under which IBM would receive warrants to buy up to 8 percent of ACI's outstanding shares, half exercisable at $27.50 a share and the balance at $33 a share. (Editing by Amitha Rajan)