Citrix Raises Annual Outlook as Quarterly Earnings Jump
October 19 2016 - 6:01PM
Dow Jones News
By Ezequiel Minaya
Citrix Systems Inc. reported better-than-expected results in the
latest quarter and raised its outlook for the year as the software
company benefited from climbing revenue from its license updates
and maintenance business, its largest division.
Shares of the company climbed 2.6% after hours, to $88.50.
Citrix's license updates and maintenance business -- responsible
for about 47% of revenue for the September quarter -- rose 5%
compared with the same period last year. During the third quarter
of 2015, the company was hit by a roughly $65 million impairment
charge, which made for a favorable comparison for the latest
quarter.
The company raised its annual outlook to adjusted earnings
between $5.18 and $5.20 on revenue in the range of $3.40 billion to
$3.41 billion.
Previously the company had expected adjusted earnings on a per
share basis between $5.00 and $5.10 with revenue in the range of
$3.37 billion to $3.39 billion.
The company also released a preliminary outlook for the 2017
fiscal year that called for revenue to rise between 3% and 4%.
Citrix makes workplace software that allows employees to work
from their own desktops or mobile devices off a centralized data
center, which is known as virtualization.
Overall, in the latest period, Citrix reported a profit of
$131.9 million, or 84 cents a share, up from $55.9 million, or 35
cents a share, a year ago. Excluding certain items, profit rose to
$1.32 a share from $1.04 a year earlier, handily topping analysts'
estimates of $1.19.
Revenue rose 3.4%, to $841.3 million, above analysts' views of
$827.2 million.
The company had forecast earnings on a per share basis between
$1.18 and $1.20 on revenue in the range of $820 million and $830
million.
Revenue in half of the company's four divisions climbed.
Professional-services revenue -- which includes consulting, product
training and certification -- fell 19%, to $29.9 million. Revenue
from product and licenses, or new product purchases, remained
virtually flat at $206.2 million. Meanwhile, software-as-a-service
revenue rose 8.5%, to $207.1 million, and revenue from license
updates and maintenance, which includes annuity revenue from
subscriptions paid when new licenses are purchased, rose 4.9%, to
$398.2 million.
Earlier this year Citrix agreed to merge its virtual-meeting
division with LogMeIn Inc. Citrix had already said it would spin
off the business, known as GoTo, in a tax-free deal in the second
half of the year. GoTo's software allows users to connect to
business meetings from various devices, among other functions.
Last fall, Citrix also announced plans to cut about 1,000 jobs.
The moves came after activist investor Elliott Management Corp.
called for changes at the software firm.
Elliott had urged Citrix to slim down by selling assets and
cutting costs.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
October 19, 2016 17:46 ET (21:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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