SAN FRANCISCO (AP) — Progress Software Corp. shares dropped nearly 12 percent in extended trading Tuesday after the company reported fiscal third-quarter results and offered lackluster guidance for the current quarter.
CEO Richard Reidy called the results “disappointing” and blamed a challenging market, particularly in sales to financial services businesses.
The stock of the Bedford, Mass.-based business software maker fell $2.31, or 11.9 percent, to $17.08 in extended trading, after the results were announced.
In the three months ended Aug. 31, which was Progress Software’s fiscal third quarter, net income fell 7 percent to $8.6 million, or 13 cents per share, from $9.2 million, or 14 cents per share, a year ago. Excluding items, the company earned 31 cents per share. Analysts had expected 28 cents per share, on that basis, according to FactSet.
Revenue fell slightly to $128.3 million, from $128.7 million in the year-ago quarter. Analysts were expecting $128 million, according to FactSet.
“Our fiscal third quarter results were disappointing due to the decline in license revenue within the Enterprise Business Solutions segment,” Reidy said in a statement. “The challenging macroeconomic environment in August, particularly within financial services, led some customers to postpone their purchasing decisions. With our focus on solution selling, delays in closing larger deals have a material impact on our quarterly results.”
The unit Reidy was referring to makes software that helps companies manage their day-to-day transactions, among other things.
For the fiscal fourth quarter, the company expects earnings of 30 cents to 33 cents per share, excluding items, on revenue of $130 million to $134 million. Analysts were expecting earnings of 42 cents per share, excluding items, on revenue of $145.4 million.
For the full fiscal year, the company expects earnings of $1.42 to $1.45 per share, excluding items, on revenue of $527 million to $531 million. Analysts were expecting earnings of $1.51 per share, excluding items, on revenue of $544.8 million.