DARMSTADT-EBERSTADT (dpa-AFX) - Shares of Software AG (STWRY.PK) declined around 8 percent in the morning trade on Frankfurt's Xetra after the German Business infrastructure software firm posted lower net income for the second quarter, due to drop in maintenance and services revenues, while revenues from licenses remained stable. The company also backed its full-year outlook, but warned that the results could be at the low end of the given ranges, given the increasingly difficult market environment.
CFO Arnd Zinnhardt said, 'In the second half of the year, we will continue to focus on expanding our promising BPE business line. We are ideally equipped to make more acquisitions in this area. To that end, we have increased our liquidity reserves through a successful promissory note, giving ourselves the room to finance further expansion.'
For the second quarter, net income declined 23 percent to 28.80 million euros from last year's 37.44 million euros. On a per share basis, earnings fell 21 percent to 0.34 euros from 0.43 euros. Operating result for the quarter fell 15 percent to 45.28 million euros.
Revenues slid 8 percent to 237.75 million euros from 258.5 million euros a year ago. Overall, product revenue declined from last year, while it contributed about 71 percent of total Group revenue, compared to last year's 68 percent, further improving revenue distribution towards the high-margin license and maintenance revenues that drive growth.
As for the rest of the fiscal year, the company said it is optimistic due to the positive start to the third quarter, and confirmed full-year forecast for 2013, despite an increasingly uncertain market environment in some countries.
For the year, the company said it continues to expect earnings per share in the range of 1.70 - 1.80 euros.
Software said it is anticipating growth of 16 to 22 percent in BPE revenue for fiscal year 2013 at constant currency, and revenue in the traditional Enterprise Transaction Services or ETS database business will likely fall by four to nine percent, both at constant currency.
On Xetra, Software AG shares are currently trading at 23.75 euros, down 1.97 euros or 7.66 percent.
Copyright RTT News/dpa-AFX
© 2013 AFX News
