BMC Software Swings to a Loss

The third quarter beats estimates, though, and the company guides to an in-line fourth quarter.
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BMC Software

(BMC)

posted a fiscal third-quarter loss Tuesday and told investors to expect in-line results for the fourth period.

For its third quarter ended Dec. 31, BMC posted a loss of $44 million, or 20 cents a share, after restructuring charges. Excluding those costs, latest-period earnings were $43 million, or 19 cents a share, which was at the high end of the company's 15-to-20-cent EPS guidance and 2 cents ahead of the Wall Street consensus estimate. A year ago the company earned $12 million, or a nickel a share.

Sales rose 12% sequentially to $375 million. On Tuesday morning, BMC shares slipped 41 cents to $21.13.

"BMC Software's strong third quarter performance is a testament to our strategic focus and solid execution," said CEO Bob Beauchamp. "License bookings, excluding Remedy, grew 23% compared to the same quarter last year as we benefited from an improving IT spending environment and solid execution. The Remedy business unit continues to generate strong revenue growth and high operating margins."

BMC said total license bookings, reflecting new contracts signed during the quarter, rose 30% from second-quarter levels and 78% year-over-year.

The company also forecast mid-single digit percentage revenue growth in the fourth quarter compared to the third quarter, with pro forma earnings hitting 21 to 25 cents a share. Fiscal 2004 earnings per share should be 53 to 57 cents on a pro forma basis, which is above the previous 48-to-53-cent range.

BMC Software projected 2004 cash flow from operations of $400 million to $450 million, higher than its previous guidance of $340 million to $390 million.