BMC Hits Lowered Guidance, Will Cut 13% - TheStreet

BMC Hits Lowered Guidance, Will Cut 13%

The software company will pare 900 jobs from its workforce.
Author:
Publish date:

BMC Software

(BMC)

, the software infrastructure management company that

preannounced disappointing fiscal first-quarter results earlier this month, said Monday it will lay off 13% of its workforce to improve profitability.

After reporting that its first-quarter profit from a year ago swung to a net loss in the first quarter, Houston-based BMC said it will implement a restructuring, including layoffs, facility closures and office consolidations. The company will cut about 900 jobs from a total workforce of approximately 6,825.

The company will offset part of those cuts by more aggressively expanding offshore hiring, bringing the net decline in the company's worldwide workforce to about 8%, the company explained in a conference call.

BMC expects quarterly operating expenses to decline $25 million to $30 million after the savings are fully realized in the March quarter, the company's fiscal fourth quarter.

Shares of BMC inched up 24 cents, or 1.8%, to $13.94 in recent trading.

BMC, which preannounced its results July 7, said its GAAP net loss was $6.1 million, or 3 cents per share in its first quarter, which ended June 30. That reversed year-ago net earnings of $5.2 million, or 2 cents a share. The company had warned its bottom line could show a loss ranging from 1 cent to 4 cents a share.

Pro forma earnings, excluding special items, came in at 3 cents a share, down from 8 cents a share in the first quarter a year ago. Analysts' lowered estimates forecast BMC earnings at 2 cents a share, according to Thomson First Call, and the company had preannounced pro forma earnings would range from a penny to 4 cents a share.

Total first-quarter revenue rose 2% from a year earlier to $309.9 million, just shy of the lowered consensus estimate of $310.6 million but within the company's preannounced range of $305 million to $312 million. Total license revenue dropped 21% year over year to $107.6 million.

Before the company's preannouncement, Wall Street had estimated BMC would bring in 8 cents a share in pro forma earnings on $331 million in revenue in the first quarter.

BMC said second-quarter revenue will be up sequentially, while analysts are expecting revenue at $322 million, and pro forma earnings to range from 4 cents to 6 cents a share, lower than the 7-cent consensus estimate.

For the full year, BMC said it's comfortable with the current consensus earnings estimate of 46 cents per share.