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Monday, systems management software maker Quest Software, Inc. (QSFT), reported a surge in second-quarter profit, helped mainly by lower operating expenses, even as revenues declined 5.3%. Earnings for the quarter came in ahead of analysts' consensus by a wide margin, but revenues fell short. The company also announced board approval for a $100 million share buyback program.
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| | | {loadposition contentad} | | | | | Commenting on the results, Doug Garn, president and CEO said, "I am pleased with our second quarter results and the continued refinements we have made to our operating model related to expense management. While the current environment is challenging, we remain focused on delivering value-add products and services to assist our customers in managing their complex physical and virtual application and infrastructure environments "
Among others in the industry, database software giant Oracle Corp. (ORCL) in June reported a 7% decrease in fourth-quarter profit on strong US dollar. Net income was $1.89 billion or $0.38 per share, compared to $2.04 billion or $0.39 per share last year. Non-GAAP net income was $2.33 billion or $0.46 per share, compared to $2.43 billion or $0.47 per share a year back. Revenues fell 5% to $6.86 billion from the previous year period.
Another industry peer, CA, Inc. (CA) last month reported a slight decline in first quarter net income to $195 million from $196 million in the prior year. Earnings per share was $0.37, flat with last year. Non-GAAP net income for the quarter increased to $229 million or $0.42 per share from $214 million or $0.40 per share in the prior year. Revenues dropped to $1.05 billion from $1.09 billion.
Aliso Viejo, California-based Quest posted a second quarter net income of $20.5 million or $0.21 per share, compared to $8.3 million or $0.08 per share in the corresponding period last year.
On a non-GAAP basis, net income for the quarter was $28.1 million or $0.29 per share, compared to $17.7 million or $0.17 per share a year earlier. On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.20 per share for the quarter. Analysts' estimates typically exclude one-time items.
GAAP operating margin for the quarter increased 2.5% year-over-year to 13.0%. GAAP operating income was $21.3 million, compared to $4.4 million a year ago. Non-GAAP operating margin was 20.6%, compared to 10.8% in the previous year. Non-GAAP operating income was $33.8 million, compared to non-GAAP operating income of $18.7 million a year before.
In the preceding first quarter, Quest reported net income of $9.9 million or $0.10 per share, compared to $13.3 million or $0.13 per share a year earlier. Non-GAAP net income was $21.5 million or $0.22 per share, compared to $22.2 million or $0.21 per share last year.
Total revenues for the quarter under review declined 5.3% to $164.3 million from $173.4 million last year. Analysts had a consensus revenue estimate of $165.14 million for the quarter.
License revenues for the quarter declined to $61.6 million from $75.3 million last year, while Services revenues increased to $102.6 million from $98.1 million a year back.
Total operating expenses for the quarter declined to $121.9 million from $146.2 million last year. Sales and marketing expenses declined to $65.5 million from $81.3 million a year ago, while research and development expenses dropped to $35.4 million from $39.3 million. General and administrative expenses declined to $17.7 million from $22.2 million in the previous fiscal.
In the first quarter, Quest's revenues fell 4.2% year-over-year to $165.6 million.
For the first six months of the year, the company posted a net income of $30.4 million or $0.32 per share, compared to $21.6 million or $0.20 per share in the prior year. Non-GAAP net income was $49.6 million or $0.52 per share, compared to $39.9 million or $0.38 per share in the prior year.
Total revenues for the first six months decreased 4.7% to $329.9 million from $346.2 million a year earlier.
The company also said that in August 2009 its board has authorized a plan to repurchase up to $100 million of its common stock.
QSFT closed $14.93, down $0.26 or 1.71%, on the Nasdaq. After hours, the stock further gained $0.58 or 3.88%. In the past 52-week period, the stock has traded in the range of $10.31 - $15.34, with an average 3-month volume of 1.15 million shares.
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