Progress Software Corp. (PRGS: Quote) Wednesday reported a loss for the second quarter, hurt mainly by higher restructuring costs and a sharp decline in software license revenues.
Nonetheless, adjusted earnings for the quarter came in ahead of analysts' expectations, so did revenues.
For the past few quarters, Progress Software has been recording a decline in revenues mainly due to lower software license revenues. Software licenses revenues for the quarter dropped 35 percent to $29.7 million, while maintenance and services revenues decreased 5 percent to $84.9 million.
The company said revenue for the strategic 'Core' products, represented by the Progress OpenEdge platform, DataDirect Connect products and the Decision Analytics portfolio declined 14 percent from last year.
Progress Software, in late April, revealed new restructuring plans to divest ten of its non-core product lines and layoff about 10 to 15 percent of its total workforce. The company had then said new steps were necessary to improve profitability and shareholder value.
"Our quarterly results reflect a company in transition," said Chief executive Jay Bhatt.
"Our second quarter performance was impacted by significant disruption among our employees, customers, and partners caused by the announcement of dramatic changes to our strategy and operations, among other things. We anticipate some disruption to continue into the third and fourth quarters but feel confident with the potential of our 'Core' products to exit the year with positive momentum," Bhatt added.
Progress Software, which competes with entities such as Tibco Software, said its revenues for the quarter dropped 15 percent to $114.6 million from $134.7 million last year. Analysts expected revenues of $112.37 million for the quarter.
The Beford, Massachusetts-based company's second-quarter net loss was $1.9 million or $0.03 per share, compared to net income of $18.0 million or $0.26 per share last year.
On an adjusted basis, net income for the quarter declined to $0.21 per share from $0.38 per share last year. On average, three analysts' polled by Thomson Reuters expected earnings of $0.17 per share for the quarter. Analysts' estimates typically exclude one-time items.
Restructuring costs for the quarter increased to $8.5 million from $1.1 million last year.
Moving forward, Progress Software did not detail a guidance for the third quarter citing "continued anticipated disruption".
For the fourth-quarter, the company expects core revenue in a range of $90 million to $95 million.
Core revenue for the fiscal year ending November 30, 2013 is still expected to grow 5 percent on a constant currency basis.
PRGS closed Wednesday's trading on the Nasdaq at $19.90, up $0.61 or 3.16%, on a volume of 0.3 million shares. In after-hours trade, the stock gained $0.10 or 0.50%.
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by RTT Staff Writer
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