SAN JOSE, Calif. (AP) — Shares of Open Text Corp. slumped Wednesday after the company issued an earnings report that fell short of Wall Street expectations.
The numbers showed that while business spending on technology has generally been strong after the Great Recession, not all areas have benefited as strongly as many investors would like.
Open Text’s software helps companies manage their documents, email and Internet and other digital content.
Open Text said that its net income increased 38 percent and revenue rose 19 percent, but the results were short of Wall Street’s targets.
The Waterloo, Ontario-based software company said that net income was $28.6 million or 49 cents per share, in the fiscal fourth quarter, which ended June 30. That compares with $53.2 million, or 92 cents per share, a year ago.
Adjusted net income was $1.05 per share, short of the $1.12 per share that analysts polled by FactSet expected.
Revenue rose to $285.5 million, short of the $287.1 million that analysts expected.
Open Text management suggested in comments on a conference call with analysts that Open Text’s license growth was lower than expected.
Mike Abramsky with RBC Capital Markets said that Open Text’s license revenue growth of 17 percent was below the company’s previously disclosed targets. John Shackleton, Open Text’s CEO, said that the issue concerned new acquisitions, and that once they are integrated growth will be stronger.
Shares fell $4.55, or 8 percent, to $52.92 in extended trading, after falling $2.86, or 4.7 percent, to $57.47 during the regular trading session.