Tibco Q1 Profit Increases, Buy Netrics - Update

TIBX 03252010

Event driven software provider TIBCO Software Inc. (TIBX), Thursday reported an increase in first quarter profit helped by a sizable growth in its license and service revenues. Separately, Tibco also announced the purchase of privately held enterprise data matching software maker Netrics for an undisclosed amount. Following the news, the company stock eased out of the red and is currently trading higher at $10.65.

Quarterly net income attributable to Palo Alto, California-based Tibco rose to $10.43 million or $0.06 per share from $5.63 million or $0.03 per share in the same quarter a year ago.

On a non-GAAP basis, net income excluding stock based compensation expenses and other items was $19.95 million or $0.12 per share, compared with prior year's $15.23 million or $0.09 per share.

On average, 11 analysts' polled by Thomson Reuters expected earnings of $0.10 per share for the quarter. Analysts' estimate typically excludes' one-time items.

Tibco's revenue jumped 17% to $155.0 million from $132.9 million in the year-ago quarter, beating Street estimates of $154.53 million.

Revenues were helped by a 21% increase in License revenue to $54.2 million from $44.85 million and a 14.6% increase in service and maintenance revenue to $100.87 million from $88.05 million.

Vivek Ranadivé, chief executive officer said, "Each of our major regions grew total revenue by double-digit percentages, and seven separate verticals contributed five percent or more of our business."

The current increase in profit is, however, a recovery from the decline Tibco posted in its sequential fourth quarter, even though marginal. The decline was the product of higher income tax provision, which more than offset a rise in revenue. Profit during the quarter was $31.73 million or $32.29 per share with revenues of $195.57 million.

However, in the third quarter, profit of the company was up at $14.9 million or $0.09 per share helped by lower expenses, nullifying declines in revenues from $162.3 million to $150.3 million.

This undulating pattern in the profit loss account was somewhat expected to stabilize as the company makes its more formidable by bringing in companies like Netrics to its shade.

The acquisition of the enterprise data matching software products maker Netrics will complement Tibco's data governance, master data management and event-driven solutions. Foresight Corp. and DataSynapse Inc. are the other two companies recently acquired by Netrics.

The industry, however, is still waiting, with Oracle Corp. (ORCL), yet another player in the industry, reporting disappointing performance in its third quarter. Oracle's profit dropped to $1.2 billion or $0.23 per share from $1.3 billion or $0.26 per share, while revenues, despite being hit hard by poor demand created by the meltdown, rose 17% at $6.4 billion.

For Tibco, operating expenses for the quarter under review rose to $96.88 million from $85.60 million in the comparable quarter last year. Income from operations were $15.57 million, compared to $9.24 million in the same quarter last year.

During the quarter,Tibco closed 97 deals over $100k and had 10 deals over $1 million

On 25 march 2009, brokerage AmTech Research initiated a 'Buy' rating on TIBX shares, with a mean target of $10.85.

TIBX closed Thursday's regular trading at $10.61, down $0.03 or 0.28%, on a volume of 3.58 million shares. In after-hours, the stock gained $0.04 or 0.38%, trading at $10.65. In the last 52-week period, the stock traded in a range of $5.24 to $10.96, with a three-month average volume of 2.21 million shares.

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