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BMC Software Inc. (BMC) Tuesday reported a jump in its first-quarter profit in the absence of a huge write down related to the acquisition of BladeLogic in the year-ago quarter. The company's results came in above the Street expectations. The company also raised its non-GAAP earnings forecast for fiscal 2010.
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| | | {loadposition contentad} | | | | | For the first quarter, GAAP net earnings for Houston, Texas-based company jumped to $82.4 million or $0.44 per share from $1.2 million and $0.01 per share in the year-ago quarter. Amongst others in the industry, PM CA, Inc. (CA), formerly known as Computer Associates International Inc., in its first quarter, reported a profit that edged down to $195 million or $0.37 per share, as revenues declined 3% to $1.05 billion.
Another player, International Business Machines Corp. (IBM) reported a second-quarter profit that rose 12% to $3.10 billion, or $2.32 per share, as lower tax rate improved gross margins and tight cost control offset a 13% revenue drop. Revenues fell 13% to $23.25 billion. In the year-ago quarter, BMC earnings were impacted by a $50 million in-process research and development write-down recorded in connection with the acquisition of BladeLogic. On a non-GAAP basis, net earnings, excluding special items, rose to $110.6 million or $0.59 per share from $82.4 million or $0.43 per share in the corresponding quarter last year. Non-GAAP earnings exclude exit costs and related charges, primarily comprising severance costs and lease abandonment costs, share-based compensation and amortization of intangible assets, the company noted. On average, eleven analysts polled by Thomson Reuters expected earnings of $0.49 per share for the quarter. Analysts' estimate typically excludes one-time items. Total revenues rose 2.9% to $450.0 million from $437.5 million in the prior-year quarter, surpassing the Street estimates of $441.11 million. On a constant currency basis, revenue grew 6%. In the preceding quarter, BMC reported a decline in the fourth-quarter profit to $83 million or $0.45 per share, amid the worsening economic conditions that affected the IT spending globally. Revenue increased 3% to $479 million. For the quarter under review, BMC Software's License revenue increased 11.8% to $167.0 million, while Maintenance revenue dropped 1.2% to $251.2 million and professional service revenue declined 5.9% to $31.8 million. Total operating expenses declined 19.4% to $341.8 million from $424.2 million in the comparable quarter last year. Operating income was $108.2 million, up from $13.3 million in the corresponding quarter last year. Total bookings in the first quarter were $390 million, down 19% as reported and 15% on a constant currency basis. Bob Beauchamp chief executive officer said, "The weaker economic environment, a longer sales cycle and the lumpy nature of our MSM business affected first quarter bookings. Our markets, customer base, strategy, partnerships, competitive position, financial position and technology remain strong." During the first fiscal quarter, BMC continued its stock repurchase activities, spending $50 million to repurchase 1.4 million shares. As of June 30, 2009, the Company has approximately $295 million remaining under its existing share repurchase program. The Company plans to increase its share repurchase activity in the second quarter. Looking ahead to full year 2010, BMC Software said it is raising its full-year non-GAAP earnings per share guidance and reiterating guidance for all other key metrics. BMC Software now expects non-GAAP earnings in the range of $2.47 - $2.57 per share, which at the midpoint would represent a 12% increase year-over-year. The Street currently expects earnings of $2.42 per share for the quarter. Previously, the projected fiscal 2010 non-GAAP earnings were in the range of $2.37 - $2.47 per share. Non-GAAP earnings assumes a non-GAAP effective tax rate of 29% and excludes an estimated 58 cents to 62 cents of special items, including expenses related to the amortization of acquired technology and intangibles, stock-based compensation and restructuring activity. On July 31, 2009, AmTech Research Initiated a 'Buy' rating on BMC Software shares, with a mean target of $36.75. BMC closed Tuesday's regular trading at $34.30, down $0.29 or 0.84%, on a volume of 2.44 milllion shares. In after-hours, the stock further dropped $0.27 or 0.78%, to trade at $34.32. In the last 52-week period, the stock traded in the range of $20.58 to $35.76, with a three-month average volume of 2.44 million shares.
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