RSA Security Cuts Its Loss, Meets Estimates
Ronna Abramson
10/16/02 - 05:47 PM EDT
RSA Security
reported Wednesday that it nearly halved its
third-quarter net loss compared to a year ago. The company credited cost controls, and revenue that was slightly higher than Wall
Street estimates, although lower than a year ago.
Calculated under generally accepted accounting principles,
the Bedford, Mass.-based security software maker
posted a third-quarter net loss of $8.2 million, or 14
cents a share, on $59 million in revenue in the
third quarter. That compares to a net loss of $15.5
million, or 28 cents a share, on $62.6 million in
revenue in the same period a year earlier. In the
second quarter, the company reported a GAAP net loss
of $25 million, or 44 cents a share, on $56.5 million
in revenue.
RSA, which is under investigation by the
Securities and Exchange Commission, reported a
pro forma net loss of 1 cent a share in the third
quarter, compared to a pro forma net loss of 10 cents
a share a year earlier and a net loss of 4 cents a
share in the previous quarter.
Wall Street analysts were expecting RSA's
third-quarter revenue to come in sequentially flat at
$56.4 million and were forecasting a pro forma net
loss of a penny a share, according to Thomson
Financial/First Call. The company's guidance predicted
revenue would range from $54 million to $58 million in
the third quarter, with earnings ranging from a pro
forma net loss of 2 cents a share to pro forma net
income of 2 cents a share. The company has not
previously provided guidance beyond the third quarter.
Looking forward, RSA said it expects
fourth-quarter pro forma earnings to range from a net
loss of 2 cents a share to net income of 2 cents a
share on revenue ranging from $56 million to $60
million. Analysts modeled the company earning 2 cents
a share on $59.7 million in revenue in the fourth
quarter.
This summer, RSA disclosed that SEC staff is
considering seeking the commission's permission
to commence a civil injunctive proceeding against the
company. In January, the SEC notified RSA that it was
conducting a formal investigation of trading in the
company's stock and of the company's disclosure of a
change in its method for estimating distributor
revenue in the first quarter of 2001.
On Wednesday, RSA said the company and certain
officers submitted a statement Aug. 2 to the SEC
explaining why they believe no action should be
brought against them. The company said it is
continuing to cooperate with the SEC.
Shares of RSA sank 39 cents, or 11.4%, to close
Wednesday at $3.03. In after-hours trading, shares
moved down fractionally to $3.
