Why Splunk (SPLK) Closed Lower on Friday

NEW YORK (TheStreet) -- Splunk (SPLK) closed lower on Friday after quarterly and full-year earnings came in below consensus and revenue guidance for the first quarter and fiscal 2015 missed expectations.

By market close, shares had taken off 2.9% to $92.75. Trading volume of 5.35 million was nearly three times its three-month daily average.

The real-time data software engineer posted net income of 3 cents a share for the three months to January. Analysts surveyed by Thomson Reuters had anticipated net income of 5 cents a share.

Quarterly revenue of $99.9 million jumped 53.2% year over year and beat consensus by $9.4 million.

For the full year, the company recorded a net loss of 3 cents a share, wider than expectations of a loss of a penny a share.

Management guided for current-quarter revenue between $78 million and $80 million, under consensus of $80.57 million.

Fiscal 2015 sales are expected around $400 million. Analysts had forecast sales of $405.21 million.

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TheStreet Ratings team rates SPLUNK INC as a Sell with a ratings score of D+. The team has this to say about their recommendation:

"We rate SPLUNK INC (SPLK) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share."

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