Verity Crushed on Outlook

Updated from March 11

Verity ( VRTY) was trading lower in the Friday premarket after the software maker said third-quarter earnings rose but that fourth-quarter income would trail estimates.

The company earned $4.8 million, or 12 cents a share, in the latest quarter compared with earnings of $3.7 million, or 10 cents a share, last year. On a pro forma basis that excludes amortization, the company earned 13 cents a share in the latest quarter. Revenue rose 9.7% from a year ago to $30.5 million.

Analysts surveyed by Thomson One Analytics were forecasting earnings of 11 cents a share in the latest quarter.

Verity's software-product revenue rose 13.2% year over year to $17.8 million in the third quarter, representing 58.3% of total revenue.

For the fourth quarter, Verity predicted it would earn a pro forma 9 cents to 12 cents a share on revenue of $35 million to $37 million. Analysts were forecasting earnings of 14 cents a share on revenue of $31.9 million.

The shares were recently trading on Instinet for $13.76, down $2.02, or almost 13%, from their 4 p.m. EST Thursday close.

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