WASHINGTON (dpa-AFX) - Progress Software Corp. (PRGS), said Tuesday its second-quarter profit declined 6 percent from a year earlier, as increased investments in sales and professional services cut into revenues - an outcome which the company had anticipated earlier this month.
The company also detailed a weak third quarter outlook, and slashed its full-year guidance, sending its shares down by more than 6.3 percent in extended trade.
The enterprise software company's second-quarter profit dropped to $18 million or $0.26 per share from $19 million or $0.29 per share last year.
Excluding items, adjusted earnings were $26.6 million or $0.38 per share for the quarter.
On average, four analysts polled by Thomson Reuters expected earnings of $0.38 per share for the quarter. Analysts' estimates typically exclude special items.
The Bedford, Massachusetts-based company reported revenues of $134.7 million, a 6 percent rise from $127.7 million in the prior year.
Wall Street analysts expected revenues of $134.08 million for the quarter.
Maintenance and services sales were higher by 7 percent, and software licenses climbed 3 percent.
CEO Richard Reidy said: 'The company's second quarter performance did not meet our expectations due primarily to shortfalls in the Enterprise Data Solutions business unit. However, we are pleased with the continued performance of our Enterprise Business Solutions business unit with its 37% year over year growth and 49% increase in license revenue...'
During the quarter, the company's selling expenses increased to $44.3 million from $40 million last year. Further, income tax expense was higher at $9.5 million, compared with $7.6 million.
Looking ahead to the third quarter, the company expects to earn $0.20 to $0.24 per share, with adjusted earnings of $0.34 to $0.36 per share. Revenues are anticipated in the range of $133 million to $136 million.
Street analysts currently expect earnings of $0.41 per share on revenues of $137.31 million for the third quarter.
For the full year, the company lowered its outlook and now anticipate earnings of $1.08 to $1.15 per share, and adjusted earnings of $1.60 to $1.65 per share. Revenues are now forecast in the range of $550 million to $560 million.
The Street currently projects earnings of $1.71 per share, on revenues of $560.16 million for the year.
The full-year outlook compares with the March earnings guidance of $1.22 to $1.32 per share, adjusted earnings of $1.74 to $1.80 per share, and revenue in the range of $560 million to $570 million.
PRGS closed Tuesday's regular trade at $23.28, up $0.04 or 0.17%, on the Nasdaq. In after hours, the stock lost $1.48 or 6.36%.
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