BMC CEO Blasts HP Over EDS Deal
SAN FRANCISCO - The CEO of BMC Software (BMC) on Thursday lambasted Hewlett-Packard's (HPQ) - Get Report buyout of a major software and hardware integrator, announced this week.
Rather than making nice with his prospective new client, BMC CEO Robert Beauchamp said during the company's fourth-quarter earnings conference call that H-P has "declared war" on the ecosystem of data-system suppliers and integrators by moving to acquire
Electronic Data Systems
(EDS)
.
With a market cap of $7 billion, business-software supplier BMC posted annual revenue of $1.73 billion for the year just ended.
"In last 24 hours,
I have spoken with very senior executives for the largest tech companies in the world who view" H-P's buyout of the consultant and systems integrator as a move toward becoming "a more hostile, less friendly partner," as H-P creates a mirror image of
IBM's
(IBM) - Get Report
business model, Beauchamp said.
The acquisition
poses competitive threats to many
EDS hardware and software suppliers, as well as other integrators who have not previously viewed H-P as a competitor.
EDS has historically been a good customer of BMC, which sells software tools for mainframe computers, Beauchamp said. "They'll need to maintain that relationship with us or go to IBM. We'll do a good job of being a provider of mainframe tools" to EDS going forward, he added.
Houston, Texas-based BMC reported revenue of $466.9 million, up 11.3% from $419.4 million for the same quarter of last year. Analysts were expecting a top line of $460.3 million, according to Thomson Reuters.
Net income jumped 54.5% to $97 million, or 50 cents a share, vs. $62.8 million, or 30 cents a share, in the prior year.
Excluding special items, EPS was 63 cents. Analysts were looking for EPS of 51 cents.
Shares were up $1.59, or 4.4%, to $38.02 in recent trading.
But the company revised reported earnings for the prior three quarters, reducing reported EPS for the year just ended by 5 cents, excluding special items, and bringing full-year reported EPS to $2. The company "identified immaterial errors in its original calculation of the cumulative effect of adopting" new accounting rules, reducing retained earnings by $45.2 million during the fourth quarter to compensate for the cumulative effect of the rule change, the company stated.
Excluding items, operating margin was 29%, up 8 percentage points year over year.
Total deferred revenue at the end of the quarter was $1.78 billion, up 2.8% from $1.73 billion a year ago. Core software license bookings were up 16% year over year to $88 million, about $5 million below BMC's estimates, but still growing faster than the market, Beauchamp said.
For fiscal 2009, BMC said EPS, excluding special items, would range from $2.10 and $2.20. Analysts were looking for a top line of $1.833 billion and EPS, less items, of $2.09.
In the software sector,
Intuit
(INTU) - Get Report
will post earnings Tuesday, May 20.
Salesforce.com
(CRM) - Get Report
reports results Wednesday, May 21.