Blue Coat 1Q results fall short of expectations

SUNNYVALE, Calif. (AP) ? Blue Coat Systems Inc. reported fiscal first-quarter results Tuesday that fell shy of analyst expectations as revenue from its Internet security products dropped.

The company also issued a financial outlook for its second quarter that was below Wall Street views. Its stock fell 18 percent in extended trading.

Blue Coat, which has been working to revive growth, also informed investors that CEO Michael Borman is being replaced by Gregory Clark. Borman, the former head of Avocent Corp., started as Blue Coat’s CEO last August when Brian NeSmith became its chief product officer after serving as CEO for more than a decade.

For the quarter that ended July 31, Blue Coat earned $2.7 million, or 6 cents per share, compared with $13.9 million, or 29 cents per share, in the same quarter a year earlier.

Excluding one-time items, Blue Coat earned 18 cents per share.

Revenue fell 11 percent to nearly $110 million. The company’s product revenue, which makes up the bulk of its sales, fell nearly 23 percent to $58.6 million. Blue Coat said weaker sales in a government-geared segment of its business hurt its bottom line.

Analysts polled by FactSet expected adjusted net income of 22 cents per share on $114 million in revenue.

For the current quarter, Blue Coat predicted it will report either a loss as great as 4 cents per share or a profit as large as 4 cents per share. Excluding one-time items, Blue Coat forecast net income of 9 to 17 cents per share. The company expects revenue of $103 million to $110 million.

Analysts are looking for adjusted earnings of 24 cents per share on $116 million in revenue.

Blue Coat added that Clark will become CEO by mid-September. He is a former CEO of enterprise software company Mincom, which was purchased by the ABB Group in July.

Blue Coat board member Carol Mills will be interim CEO until Clark takes on his post, the company said.

Shares of Blue Coat sank $3.18 to $14.50 in after-hours trading. The stock finished trading down 25 cents at $17.68.