Progress Software Profit Tops View, Details Strong Outlook; Shares Up 7%

(RTTNews) - Progress Software Corp. (PRGS) Thursday reported a decline in third-quarter profit, hurt largely by the absence of income from discontinued operations, despite lower operating costs and revenue growth. Nonetheless, earnings for the quarter came in ahead of Wall Street estimates, while revenues fell short.

Shares of the business software maker surged 7 percent in extended trade after it lifted full-year earnings outlook and detailed a strong fourth quarter guidance.

Bedford, Massachusetts-based Progress Software's third-quarter profit declined to $11.1 million or $0.22 per share from $24.8 million or $0.46 per share last year.

Income from continuing operations, which excludes results from discontinued operations, rose to $11.1 million from $7.2 million last year.

Excluding one-time items, adjusted earnings for the quarter rose to $0.39 per share from $0.27 per share a year ago. On average, four analysts polled by Thomson Reuters expected earnings of $0.33 per share for the quarter. Analysts' estimates typically exclude one-time items.

Progress Software, which competes with the likes of Tibco Software, said revenues for the quarter rose 2 percent to $79.3 million from $77.6 million last year. Analysts had a consensus revenue estimate of $79.7 million for the quarter.

Software licenses revenues rose 3 percent to $26.4 million, while maintenance and services revenue improved 2 percent to $52.9 million.

Sales and marketing expenses declined 8 percent to $22.5 million while general and administrative costs dropped 11 percent to $12.2 million a year ago.

For the full year 2014, the company now expect adjusted earnings of $1.47 to $1.50 per share, up from its prior outlook of $1.38 to $1.45 per share. Progress Software lowered the upper-end of its full year revenue guidance by $3 million to a range of $331 million to $335 million. Analysts currently expect earnings of $1.42 per share on revenues of $331 million for the year.

For the fourth quarter, the company expects adjusted earnings of $0.44 to $0.47 per share on revenues of $96 million to $100 million. Analysts currently expect earnings of $0.44 per share on revenue of $96 million.

PRGS closed Thursday's trading at $23.15, up $0.05 or 0.22%, on the Nasdaq. The stock further gained $1.63 or 7.04% in the after-hours trade.