Citrix Second-Quarter Profit Up 12%, Lifts Full-Year View

Date : 07/25/2012 @ 4:56PM
Source : Dow Jones News
Stock : Citrix Systems, Inc. (MM) (CTXS)
Quote : 82.49  -0.66 (-0.79%) @ 8:00PM

Citrix Second-Quarter Profit Up 12%, Lifts Full-Year View

Citrix (NASDAQ:CTXS)
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   By Nathalie Tadena 
 

Citrix Systems Inc.'s (CTXS) second-quarter earnings rose 12% as the software maker reported broad revenue gains.

The company's adjusted results and revenue beat its expectations.

Citrix again raised its full-year earnings view to $2.78 to $2.81 a share and revenue of $2.56 billion to $2.58 billion. Its April view called for earnings of $2.75 to $2.79 a share and revenue of $2.53 billion to $2.56 billion.

For the third quarter, Citrix forecast adjusted earnings of 64 cents to 66 cents a share, below the 71-cent estimate from analysts polled by Thomson Reuters. Citrix sees third-quarter revenue of $645 million to $655 million, while analysts projected $646 million.

The company also said its board has authorized up to an additional $400 million in share repurchases.

While information technology spending remains muted amid a challenging global macroeconomic environment, businesses' continued investment in cloud services remains a bright growth spot for software companies.

Citrix improves efficiency by allowing multiple systems to operate on one computer. The company has now posted double-digit revenue gains now for more than two years as its desktop-solutions business, which includes XenApp and XenDesktop, has seen its growth accelerate amid increasing demand for desktop virtualization, a key step in cloud computing.

Competitor VMware Inc. (VMW) reported its second-quarter earnings slipped 13% as margins weakened, though revenue growth and adjusted earnings were better than expected.

For the latest period, Citrix reported a profit of $92 million, or 49 cents a share, up from $81.9 million, or 43 cents a share, a year earlier. Excluding stock-based compensation and other items, per-share earnings rose to 71 cents from 57 cents. Revenue jumped 16% to $615.2 million.

In April, Citrix had projected earnings of 58 cents to 59 cents a share, below analyst estimates at the time, and revenue of $555 million to $565 million, above Wall Street's expectations at the time.

Gross margin narrowed to 84.7% from 86.5% as input costs rose 31%.

Total operating expenses increased 21%.

Revenue from product licenses, or new product purchases, climbed 9.7%. Revenue from license updates, including annuity revenue from subscriptions paid when new licenses are purchased, advanced 18%. Software-as-a-service revenue was also up 18%, while professional-services revenue increased 37%.

Shares were up 1.7% to $76.25 in recent after hours trading. The stock is up 24% since the start of the year.

Write to Nathalie Tadena at nathalie.tadena@dowjones.com

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