NEW YORK (TheStreet) -- Shares of Tibco Software Inc. (TIBX - Get Report) are lower by -6.49% to $19.47 in mid-afternoon trading on Friday after the company reported a decrease in net income to $1.6 million, or 1 cent per share for the 2014 second quarter, compared to $8.7 million, or 5 cents per share for the same period last year.
Total revenue for the company, which provides customers with middleware and infrastructure software, increased 3% to $254 million, versus $245 for the 2013 second quarter.
"We rate TIBCO SOFTWARE INC (TIBX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates TIBCO SOFTWARE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
- The net income growth from the same quarter one year ago has significantly exceeded that of the Software industry average, but is less than that of the S&P 500. The net income increased by 27.8% when compared to the same quarter one year prior, rising from $9.51 million to $12.15 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TIBCO SOFTWARE INC has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TIBCO SOFTWARE INC reported lower earnings of $0.51 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($0.94 versus $0.51).
- Net operating cash flow has decreased to $52.87 million or 16.37% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Software industry and the overall market, TIBCO SOFTWARE INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TIBX Ratings Report