Market Overview

Tibco Software Inc. Slides; CFO Says 'We're In A Transition'


Tibco Software Inc. (NASDAQ: TIBX) shares slid Friday after the company posted lackluster third-quarter results and forecast fourth-quarter earnings well below expectations.

In the year to date, shares are down nearly 14 percent, including a drop Friday of more than 6 percent.

The Palo Alto, California, company confirmed recently that it launched a strategic review Aug. 13 with the help of investment bankers Goldman Sachs and others.

Tibco said Thursday it expects fourth-quarter adjusted earnings of $0.18 to $0.24 a share, on revenue of $290 million to $305 million. But Wall Street expects earnings of $0.32 a share, on revenue of $313 million.

"It's important to remember that we have just completed the first quarter of what we've previously described as a three to four quarter transition," Chief Financial Officer James Johnson said in a conference call with analysts Thursday.

Like many in the industry, Tibco is shifting its business model to subscription-based revenue from licensing. Third-quarter revenue fell 5.6 percent to $255.6 million from $270.9 million last year. Analysts expected $272.5 million.

Adjusted earnings of $0.14 also missed expectations -- by $0.04 a share -- while net earnings tumbled to $2.6 million or $0.02 per share from $21.3 million or $0.13 per share last year.

In an August letter to Tibco's board shareholder Praesidium Investment Management Co. said a strategic acquirer "could pay a sizable premium to the current public market valuation and earn very high returns on an acquisition."

But Wedbush's Steven Koenig said Thursday Steve Koenig said he's "not sanguine" about Tibco's prospects for obtaining an attractive offer.

Posted-In: James Johnson Praesidium Investment Management Co. Steve Koening WedbushEarnings News Guidance


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