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Compuware Warns Of Big Q4 Miss

Business software maker Compuware Corp. (CPWR) warned Wednesday that its fourth quarter results would come in way below analysts' current consensus estimates, due to delays in closing a large number of deals. Accordingly, the company also lowered its fiscal year 2013 revenue and earnings outlook.

The company said it expects revenue of $237 million to $241 million and adjusted earnings of $0.05 to $0.06 per share for its fourth quarter ended March 31, 2013.

Analysts polled by Thomson Reuters currently expect the company to earn $0.15 per share on revenue of $272.81 million for the fourth quarter. Analysts' estimates typically exclude special items.

"During the quarter, a large number of deals we had anticipated closing in Q4 were pushed into the new fiscal year, significantly impacting our results," said Compuware CEO Bob Paul. "This deal delay occurred because many clients and prospects were unable to formalize their IT budgets during the period. In fact, we expect 75% to 80% of these pushed deals to close in the next fiscal year."

For the fiscal year 2013, the company said it now expects revenue of $942 million to $946 million and adjusted earnings of $0.26 and $0.28 per share. In October, the company said it expected fiscal 2013 revenues of $980 million to $995 million and adjusted earnings of $0.36 to $0.40 per share.

Analysts polled by Thomson Reuters currently expect the company to earn $0.36 per share on revenue of $977.45 million for the fiscal year 2013.

"I want to reiterate our commitment to maximizing shareholder value and executing the value-creation actions we announced on January 25, which include the complete spin-off of Covisint, the issuing of an annual $0.50 dividend and significant expense reductions," CEO Bob Paul said.

Paul said the company's board continues to be committed to carefully reviewing and evaluating any credible offer it receives that delivers full value to its shareholders, working together with its financial advisors Goldman, Sachs & Co. and Allen & Co.

Earlier this year, Compuware rejected an $11.00 per share buyout offer from hedge fund Elliot Management, saying it "significantly undervalues" the company.

The Detroit, Michigan-based company also said at that time that it planned to execute a spin off of the remaining Covisint shares to Compuware shareholders following its proposed initial public offering, so as to fully unlock the value of the business.

Compuware shares closed Wednesday's regular trading session at $12.03, down 23 cents or 1.88%, and lost an additional 38 cents or 3.16% following a brief trading halt in after hours trading.

by RTT Staff Writer

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