Citrix Systems Inc.'s (CTXS) first-quarter profit slid 7.1% as
the software maker reported weaker margins and higher expenses,
though revenue topped its expectations.
However, shares jumped 6.4% to $82 after hours as the Citrix's
adjusted earnings also beat its estimates and as the company lifted
its full-year guidance.
Citrix now sees full-year adjusted earnings of $2.75 to $2.79 a
share and revenue of $2.53 billion to $2.56 billion, up from its
prior guidance of $2.70 to $2.74 a share and $2.49 billion to $2.51
billion, respectively.
For the second quarter, Citrix predicted revenue of $605 million
to $615 million, above the $603 million estimate from analysts
polled by Thomson Reuters. Citrix sees second-quarter adjusted
earnings of 58 cents to 59 cents a share, below analysts' estimated
63 cents a share.
Citrix improves efficiency by allowing multiple systems to
operate on one computer. The company has posted double-digit
revenue gains over the past two years as its desktop-solutions
business, which includes XenApp and XenDesktop, has seen its growth
accelerate due to the increasing importance of desktop
virtualization. Ahead of the results, Nomura noted earlier this
month that Citrix's XenDesktop and NetScaler software now face more
difficult year-over-year comparisons, but the company will see
greater benefits from its recent expansion of its direct sales
force as the year progresses.
Last week, competitor VMware Inc. (VMW)reported its
first-quarter earnings rose 52% on double-digit revenue gains from
services and licenses.
Citrix reported a profit of $68.3 million, or 36 cents a share,
down from $73.5 million, or 39 cents a share, a year earlier.
Excluding stock-based compensation and other items, earnings rose
to 59 cents a share from 50 cents a share a year earlier. Revenue
increased 20% to $589.5 million.
In January, Citrix had predicted a profit of 49 cents to 51
cents a share on revenue of $555 million and $565 million.
Gross margin narrowed to 85.4% from 87.8% as input costs climbed
44%. Total operating expenses rose 21%.
Revenue from product licenses, or new product purchases, rose
19%, while revenue from license updates, including annuity revenue
from subscriptions paid when new licenses are purchased, climbed
19%. Software-as-a-service revenue was up 21%, while
professional-services revenue rose 33%.
The stock is up 27% since the start of the year.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com