Compuware's 4Q Earnings Lag - Analyst Blog
22 Maggio 2013 - 5:53PM
Zacks
Compuware
Corporation’s (CPWR) fourth-quarter 2013 earnings per
share (including stock based compensation of 5 cents and its
related tax effects) of 4 cents were lower than EPS of 12 cents
reported in the year-ago quarter. Reported earnings also missed the
Zacks Consensus Estimate by a penny.
Results were negatively impacted by
lower number of deals closed in the Application Performance
Management (APM) and Mainframe businesses during the quarter. Most
of the deals were pushed to fiscal 2014, primarily due to uncertain
IT budgets and the slow recovery in the European IT spending
environment.
Quarter
Details
Total revenue for the quarter
decreased 9.8% on a year-over-year basis to $239.9 million and
lagged the Zacks Consensus Estimate of $247 million.
Revenues from the APM business unit
decreased 3.5% from the year-ago quarter to $77.2 million and were
within management’s range of $76 million - $78 million.
Though Mainframe revenues decreased
19.1% year over year to $81.5 million, it marginally exceeded
management’s guided range of $79 million - $81 million. Moreover,
revenues from Compuware’s Changepoint, Uniface and Professional
Services were down 31.1%, 1.5% and 10.1%, respectively, on a
year-over-year basis. However, the Covisint business unit reported
a 20% year-over-year growth.
The company reported operating
expenses (before restructuring, impairment and advisory fees) of
$220 million, which were down 4.2% from the year-ago quarter. As a
percentage of revenues, operating expenses expanded 530 basis
points (bps).
Operating income (before
restructuring, impairment and advisory fees) was down 45.2% year
over year to $19.9 million. Operating margins contracted 530 bps
year over year due to lower revenues and higher operating expenses
as a percentage of revenues.
Net income (including stock based
compensation) was $8.7 million, which was down from $27.1 million
reported in the year-ago quarter.
Exiting the fourth quarter, cash
and cash equivalents amounted to $89.8 million, up from $64.9
million in the previous quarter. Long-term debt stood at $18
million.
Guidance
For fiscal 2014, management expects
revenues of $1 billion (up 7% year over year) while GAAP earnings
per share are expected in the range of 35 cents - 37 cents. The
company expects to save $45 million on costs in fiscal 2014.
Among the business units, Compuware
expects the APM segment to grow 15% while Changepoint revenues are
expected to increase 19%. Management also expects revenues from
Uniface to grow 2% and Covisint by 20%.
However, revenues from Mainframe
are expected to decline 5% in fiscal 2014.
Recommendation
Though the company reported a tepid
quarter, Compuware’s product portfolio, which comprises mainframe
software, project-management tools collaboration technology and
performance-management services for cloud computing and mobile
applications should see good growth.
Moreover, the company’s initiatives
to reduce costs, gain new programs and introduce new products are
expected to benefit the company, going forward.
However, Compuware operates in an
intensely competitive landscape and competes with the likes of
BMC Software Inc. (BMC), CA
Technologies (CA) and International Business
Machines Corp (IBM) with respect to one or more offerings.
Moreover, execution challenges (related to acquisition, geography
and people) are possible headwinds going forward.
Currently, Compuware has a Zacks
Rank #4 (Sell).
BMC SOFTWARE (BMC): Free Stock Analysis Report
CA INC (CA): Free Stock Analysis Report
COMPUWARE CORP (CPWR): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Grafico Azioni Xtrackers California Mun... (NASDAQ:CA)
Storico
Da Lug 2024 a Ago 2024
Grafico Azioni Xtrackers California Mun... (NASDAQ:CA)
Storico
Da Ago 2023 a Ago 2024