Fair Issac Q4 Profit Declines

11/4/2009 6:59 PM ET

(RTTNews) - Wednesday, enterprise decision management solutions provider Fair Isaac Corp. (FICO) reported a lower profit for its fourth quarter, primarily due to a higher provision for income taxes in the absence of favorable adjustments present last year.

The Minneapolis, Minnesota-based company's fourth-quarter net income decreased to $17.1 million or $0.35 per share from $23.8 million or $0.49 per share a year ago.

Fourth-quarter 2008 results included $0.07 per share of net favorable adjustments related to income tax adjustments and restructuring costs.

On average, five analysts polled by Thomson Reuters estimated earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the fourth quarter decreased to $151.9 million from $178.2 million for the fourth quarter of 2008. Analysts expected revenues of $156.06 million for the quarter.

Segment wise, revenue from Strategy Machine Solutions fell by 12% to $82.9 million, primarily due to the divestiture of telecom product lines. Scoring Solutions revenues declined 15% to $31.8 million due to a decrease in revenues derived from credit bureau risk scores.

Professional Services revenues plunged 25% to $25.0 million due to the general decline in license sales, resulting in a corresponding decline in implementation services, as well as due to discontinuation of some lower margin consulting service engagements. Analytic Software Tools revenues decreased 8% to $12.2 million due to decreases associated with the sale of the Blaze Advisor product.

Operating income for the quarter increased to $32.84 million from $29.36 million a year ago.

Provision for income taxes increased to $10.84 million from $1.72 million in the year-earlier quarter.

For the full year, net income declined to $65.10 million or $1.33 per share from $83.95 million or $1.70 per share in the prior-year period. Revenue for the period fell to $630.74 million from $744.84 million last year.

Analysts expected the company to post earnings of $1.40 per share, on revenues of $634.55 million for the full year.

Looking ahead, the company, while declining to provide specific guidance citing continuing uncertainty and limited visibility, said it expects year-over-year growth in GAAP earnings per share by a high single-digit percentage in fiscal 2010 compared to fiscal 2009. Results for the first half of fiscal 2010 are expected to be relatively flat compared to the prior year while stronger performance is expected in the latter half of fiscal 2010, the company said.