BMC Software Inc. (BMC) said Tuesday its first quarter profit slid about 44 percent from last year as higher operating costs offset a modest growth in sales, bearing the brunt of "currency and economic headwinds." BMC's quarterly earnings came in well short of Street estimates, as did revenues. Moving forward, the company reaffirmed its adjusted earnings outlook for the full year 2013.
During the first quarter of fiscal 2013, BMC's license revenue slid 9.4 percent from last year, while maintenance revenue climbed 5.4 percent. Professional services revenue was up 12 percent.
Operating expenses escalated about 11 percent from last year to $431 million, on higher cost of revenues and selling overheads.
Commenting on the results, CEO Bob Beauchamp said, "While the first quarter presented challenges, BMC's technology and product leadership remains strong." He added, "Demand for BMC's products remains high, and our customer value proposition is very attractive to companies seeking competitive advantage and IT cost reduction..."
BMC Software reported first quarter net income of $54 million or $0.33 per share, a decline from $96 million or $0.53 per share last year.
Excluding items, adjusted earnings for the quarter were $106 million or $0.65 per share, compared to $129 million or $0.72 per share in the prior year quarter.
On average, 13 analysts polled by Thomson Reuters expected earnings of $0.75 per share for the quarter. Analysts' estimates typically exclude special items.
The Houston, Texas-based company reported quarterly revenues of $504.4 million, compared to $502.4 million last year. Twelve analysts had a consensus revenue estimate of $521.79 million for the quarter.
During the quarter, BMC's cloud-related license bookings doubled year-over-year, while active SaaS customers grew three fold.
BMC repurchased 3.5 million shares for $150 million during the quarter, with $700 million remaining in its current share repurchase program as of June 30, 2012.
Moving forward to the year 2013, BMC continues to expect adjusted earnings of $3.49 to $3.59 per share. Analysts currently expect earnings of $3.51 per share.
BMC estimates full year revenues to grow in the mid single digits, with growth on a constant currency basis in the mid to high single digits.
Earlier this month, BMC resolved a board nomination tiff with Elliott Management, which owns 6.5 percent stake in the company. As per the agreement, the BMC Board increased its size to 12 directors and Elliott withdrew its notice of nomination of all of its director candidates. Elliott has been exhorting BMC to consider a sale of the company, citing under performance and loss of shareholder value.
BMC closed Tuesday at $39.60, up $0.08 or 0.20%, on a volume of 2.5 million shares on the Nasdaq. In after hours, the stock dropped $0.60 or 1.52%. In the past year, the stock has traded in a range of $31.62 - 45.70.
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