Saturday, June 30, 2012

Progress FYQ2 Beats, Sees Continued Disruption from Restructuring

Shares of development tools vendor Progress Software (PRGS) are unchanged at $19.90 in late trading after the company reported fiscal Q2 revenue and profit ahead of consensus and in line with its warning on June 7th, but said it� will not provide a forecast for the current quarter given “continued disruption” caused by the company restructuring announced in April.

Revenue in the three months ended in May fell 12%, year over year, to $114.6 million, and 21 cents a share in profit.

Analysts had been modeling $112.37 million and 17 cents a share.

Progress CEO Jay Bhatt remarked that “the second quarter performance was impacted by significant disruption among our employees, customers, and partners caused by the announcement of dramatic changes to our strategy and operations, among other things. We anticipate some disruption to continue into the third and fourth quarters but feel confident with the potential of our �Core� products to exit the year with positive momentum.”

Progress declined to forecast the current quarter, fiscal Q3, owing to the ongoing disruption, but said its fiscal Q4 ending in November would see sales to be about the same as the prior-year Q4 or up as much as 1%. That is a bit better than the Street consensus for revenue to fall almost 1% in Q4.

Oracle competes for enterprise customers with the likes of Microsoft (MSFT) and Red Hat (RHT), among others.

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