Citrix Systems Tops Estimates

Updated from 4:50 p.m. EST

SAN FRANCISCO -- Citrix Systems ( CTXS) topped the Street's expectations for its fourth-quarter earnings and guidance Wednesday and pumped up its share-buyback program.

The Fort Lauderdale, Fla., software developer reported revenue of $399.6 million, up 24.5% from a top line of $321 million a year ago. Revenue was also 5% above analysts' estimates of $380.4 million, according to Thomson Financial.

Net income rose 19%, to $62.8 million, or 33 cents a share, from $52.9 million, or 29 cents a share, in the year-ago period.

Excluding items, EPS was 49 cents, well ahead of analysts' expectations for 43 cents a share.

The stock was up $3, or 9.4%, to $35 in after-hours trading.

The board added $300 million to its share-repurchase program Wednesday. Citrix retired about 5.4 million shares during the quarter at a cost of $213 million, CFO David Henshall said on a conference call.

Citrix forecast first-quarter revenue of $367 million to $377 million and EPS, less items, of 33 cents to 35 cents. Analysts were expecting a top line of $367.6 million and EPS of 35 cents.

Full-year revenue of $1.62 billion to $1.65 billion is expected in 2008. EPS, excluding items, will range from $1.61 to $1.64. Analysts were looking for revenue of $1.61 billion and EPS of $1.62.

Deferred revenue totaled $443 million for the quarter, compared to $356 million a year ago, the company said. Operating margin was 12%.

Citrix completed the acquisition of open source virtualization developer XenSource about halfway through the quarter. It added $2 million to Citrix revenue. XenSource is expected to generate $50 million in revenue for 2008 and about $50 million to $60 million in expenses.

For 2009, XenSource is expected to contribute $200 million to the top line. The bulk of that will come from its server products, CEO Mark Templeton said. XenSource desktop virtualization products will initially be used in corporate pilot programs.

"We think we can build in the server virtualization market the same kind of symbiotic relationship with Microsoft ( MSFT) that we had with the Citrix Presentation Server," which works atop Windows Server, Templeton said. "We'll be the third player in server virtualization" after VMware ( VMW) and partner Microsoft.

Citrix's application networking products grew 48% year over year in 2007, driven by strength in its NetScaler software, Henshall said.

On-demand GoToMeeting services rose 44% for the year, to $214 million.

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