Thursday, application infrastructure software provider Progress Software Corp. (PRGS) reported a sharp fall in its second-quarter net income, hurt by lower revenues impacted by difficult economic environment and unfavorable currency rates. Nevertheless, the company raised its fiscal 2009 non-GAAP earnings forecast and reaffirmed revenue estimate.
Progress Software posted second-quarter net income of $6.9 million, down 52% from $14.47 million reported in the same quarter last year. Earnings per share declined 48% to $0.17 from $0.33 per share reported in the year-ago quarter.
Non-GAAP net income decreased 21% to $16.1 million from $20.4 million in the same quarter last year and non-GAAP earnings per share dropped 17% to $0.39 from $0.47 in the second quarter of fiscal 2008.
On average, three analysts polled by Thomson Reuters expected the company to earn $0.38 per share for the quarter. Analysts' estimates typically exclude special items.
Rick Reidy, president and chief executive officer of Progress Software, stated: "Our results reflect the difficult economic environment and unfavorable year-over-year currency rates present in Q2."
Total revenue declined 9% to $117.05 million from $127.94 million in the prior-year quarter.
On a non-GAAP basis, revenue totaled $118 million, down 8%, but up 2% at constant currency, from the year-ago quarter.
Wall Street analysts were looking for revenues of $119 million for the quarter.
Progress' software license revenue decreased 14% to $38.5 million from $45.0 million in the same quarter last year.
For the six-month period, net income decreased 61% to $10.55 million from $27.3 million a year earlier. Earnings per share dropped 58% to $0.26 from $0.62 in the same period last year.
Non-GAAP net income was $31.81 million or $0.78 per share, compared to $38.93 million or $0.89 per share in the prior-year period. Total revenue was $237.9 million, down 5% from $249.5 million in the previous-year period.
Looking ahead, for the third fiscal quarter, the company expects earnings per share to be in the range of $0.17 - $0.20. On a non-GAAP basis, earnings per share are expected to be in the range of $0.38 - $0.41.
The company anticipates GAAP and non-GAAP revenue to be in the range of $120 million - $123 million for the upcoming quarter. Analysts expect the company to report earnings of $0.42 per share, on revenues of $121.83 million for the next quarter.
Additionally, the company still expects fiscal 2009 GAAP revenue in the range of $492 million - $502 million. While, on a non-GAAP basis, Progress Software continues to expect revenues in the range of $495 million - $505 million.
Currently, full-year GAAP earnings per share are expected to be in the range of 77 cents - 86 cents. Earlier, GAAP earnings per share were expected to be in a range of $0.78 - $0.88.
On the other hand, Progress Software's present non-GAAP earnings per share outlook is in the range of $1.72 - $1.81, compared to earlier guidance of $1.70 - $1.80. Analysts expect the company to report earnings of $1.74 per share, on revenues of $499.6 million for the year.
PRGS closed Wednesday's trading session at $22.67.
For comments and feedback: editorial@rttnews.com