A Mixed Bag of Results for Application Software Stocks
04 Febbraio 2013 - 2:00PM
Marketwired
Amid the poor to terrible earnings reports from large tech stocks
across the board, application software companies like F5 Networks
and CA Technologies have returned decent earnings figures and
bolstered the swaying mood of the market to a certain extent.
Although many mega hedge funds habitually park money in some of the
top software provider stocks, individual investors are not too
happy with how the sector has performed lately.
Access our free reports on F5 Networks Inc. (NASDAQ: FFIV) and
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http://www.ShinesRooms.com/FFIV020413.pdf
http://www.ShinesRooms.com/CA020413.pdf
F5 Networks provided lower-than-expected quarterly results as a
result of a slowdown in federal sales. However, the company
forecast second quarter adjusted profit above street estimates. The
net income of the company rose from $66.5 million or 83 cents per
share to $69.5 million or 88 cents per share. F5's management
reaffirmed the forecast, assuring investors that the second half of
fiscal 2013 would come out with relatively better results compared
to Q1. The market was bolstered by this positive guidance and the
stock is expected to see a strong and productive year.
CA had total revenue of $1.19 billion in its latest reported
quarter. This is a decline of 4% y-o-y when adjusted for currency,
a decline mainly resulting from a poorer market for mainframe
solutions. This figure was also down 5.0% from $1.26 billion in the
year-ago quarter. The drop in the top-line and bottom-line did not
come as a surprise to the people on the street. This quarter, CA
had an operating income of $370 million, while it had one that was
10% more in the quarter a year ago, unadjusted for inflation.
CA provided a bleak guidance of negative 3% to negative 1% for
total revenue. Future guidance from the company includes the fact
that IBM and other major players are giving it stiff competition in
the software and cloud computing space. The company is also heavily
exposed to the downturn in the European economy, and has been
forced to reduce spending in R&D.
Despite optimistic guidance from software companies, shrinking
of the U.S. and EU economy is a major concern for the sector since
much of the earnings of this sector come from corporate products.
The sector as a whole has been forced to reduce operating income
and R&D spending, which will hurt the sector in the
long-run.
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