SolarWinds Profit Surges, Outlook Weak; Shares Down 10%

(RTTNews) - Software maker SolarWinds Inc. (SWI), Thursday reported a surge in profit for the second quarter, as revenues rose 17 percent, with earnings trumping estimates but revenues falling short of expectations.

Moving ahead, the company detailed a weak outlook for the third quarter and lowered revenue guidance for the full year, dragging its shares down by 10 percent in after-hours trade on the New York Stock Exchange.

Austin, Texas-based SolarWinds' second-quarter profit rose to $22.1 million or $0.29 per share from $13.4 million or $0.18 per share a year ago.

Excluding special items, adjusted earnings for the quarter improved to $0.52 per share from $0.41 per share a year ago. Thirteen analysts polled by Thomson Reuters expected earnings of $0.46 per share for the quarter. Analysts' estimates typically exclude special items.

SolarWinds' revenue for the second quarter grew 17 percent to $119.07 million from $101.50 million a year ago. Analysts had a consensus revenue estimate of $122.62 million for the quarter.

"During the second quarter of 2015 several areas of our business performed well including our MSP and Cloud businesses, license sales in our US Federal and Asia-Pacific businesses, our installed base teams' sales efforts and our customer retention rates," said CEO Kevin Thompson.

SolarWinds provides network management software for IT administrators and smaller businesses.

Looking forward to the third quarter, the company expects adjusted earnings of $0.49 to $0.53 per share and revenues of $130 million to $134 million. Analysts currently expect earnings of $0.52 per share on revenues of $136.07 million for the third quarter.

For the full year 2015, the company has now forecast adjusted earnings of $2.00 to $2.08 per share and revenues of $502.0 million to $512.0 million. Analysts currently expect earnings of $2.00 per share on revenues of $519.67 million for 2015.

Earlier, the company had forecast adjusted earnings of $1.92 to $2.04 per share and revenues of $512.0 million to $527.0 million.

SWI closed Thursday's trading at $47.05, up $0.45 or 0.97%. The stock, however, dropped $4.75 or 10.10% in after-hours trade.