Progress Software Profit Falls Partly On Lower License Revenue; Cuts Outlook

(RTTNews) - Progress Software Corp (PRGS) Thursday reported a plunge in first-quarter profit, hurt by lower license revenue, while the prior year had gains from discontinued operations.

Progress, which makes business software, provided weak guidance for the second quarter and cut its expectations for the full year 2014.

The weak results were not unexpected as CEO Phil Pead earlier this month warned of weak license revenue as the timing of deal closures shifted out of the first quarter.

Pead said the company is working to become a leading PaaS and on-premise solutions provider.

Progress, based in Bedford, Massachusetts, posted first-quarter net income of $11 million or $0.21 per share, compared with $31 million or $0.53 per share last year.

Results for the prior-year quarter included income from discontinued operations of $21.3 million.

Excluding items, adjusted earnings for the quarter were $14.6 million or $0.28 per share, compared with $14 million or $0.24 per share in the prior year.

On average, four analysts polled by Thomson Reuters expected earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter slid 11 percent to $74.5 million from $83.7 million a year ago. Analysts estimated revenue of $74.75 million.

Software license revenue for the quarter slide 26 percent year-over-year.

Results were somewhat offset by a decrease in income tax expense to $2.9 million from $5.4 million a year ago, the company said.

For the second quarter, Progress projects adjusted earnings of $0.32 to $0.35 per share and revenue of $78 million to $80 million. Analysts expect earnings of $0.35 per share on revenue of $82.2 million.

For fiscal 2014, the company now expects adjusted earnings of $1.37 to $1.43 per share and revenue of $331 million to $338 million. It earlier projected earnings of $1.40 to $1.50 per share and revenue of $340 million to $350 million.

Analysts expect earnings of $1.38 per share on revenue of $329 million for fiscal 2014.

Progress Software stock closed Thursday at $21.65, down $0.14 or 0.64%, on a volume of 479k shares on the Nasdaq.