Communication Breakdown: Street Whispers

NEW YORK (TheStreet) -- Don't keep your investors guessing.

It seems simple enough, but that rule of thumb appears to have been lost on a pair of companies in the financial technology sector. Though the most recent earnings results from FactSet Research (FDS) and Advent Software (ADVS) were in line with analyst expectations, shares of both companies dropped sharply after management revised guidance lower.

"Both buyside and sellside are getting cautious about spending and if they can postpone a major product or an upgrade they probably will in this environment," says Sandler O'Neill analyst Chris Donat.

FactSet's stock price fell 12.3% June 12 after it released strong third quarter results back in June, but guided lower on revenues. Advent shares plunged 16% on July 30 when it warned of cautious spending habits by clients, particularly in Europe and the Middle East, even though its latest results matched consensus.

Broadridge Financial Solutions (BR) however, avoided this fate. The provider of proxy materials and securities processing solutions exceeded consensus but reduced its guidance for fiscal year 2013 to $1.70 from $1.80. Broadridge was spared the share price plunge, however, since it did a better job of telegraphing the bad news to the market, Donat says.

-- Written by Dan Freed in New York.

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