Tibco Software Profit Down, Shares Slip 5% - Update

(RTTNews) - Tibco Software Inc. (TIBX) on Thursday reported a sharp drop in profit for the third quarter, hurt largely by lower revenues, poor margins and higher operating costs. Tibco slipped five percent in after-hours trade with the business software maker's earnings and revenues coming in shy of Wall Street estimates.

Palo Alto, California-based Tibco's third-quarter profit dropped to $2.6 million or $0.02 per share from $21.3 million or $0.13 per share last year. Excluding special items, earnings declined to $0.14 per share from $0.28 per share a year ago. On average, 17 analysts polled by Thomson Reuters expected earnings of $0.18 per share for the quarter. Analysts' estimates typically exclude special items.

Tibco, which makes programs for running corporate-data centers, said revenues for the quarter dropped to $255.6 million from $270.9 million last year. Analysts had a consensus revenue estimate of $272.5 million for the quarter.

Software revenues dropped to $85.9 million from $108.0 million last year. Tibco provides infrastructure software for companies to use on-premise or as part of cloud computing environment.

"The migration of perpetual to subscription-based licensing, together with less-than-expected revenue in Europe, had an impact on our overall software revenue results this quarter," said CEO Vivek Ranadive.

Total cost of revenues rose to $80.9 million from $78.0 million last year. Operating margin declined to 15.7 percent from 23.7 percent last year.

Early this month, Tibco Software said it has begun a review of its strategic options, after being pressured by an activist investor to explore sale.

TIBX closed Thursday's trading at $20.79, up $0.03 or 0.14%, on the Nasdaq. The stock, however dropped $1.02 or 4.91% in after-hours trade.