After lowering guidance for the first quarter earlier this month,
Internet Security Systems
cut guidance for the full year Friday. But investors knew the lower estimates were coming, and apparently decided that the company's outlook isn't as bad as some had anticipated.
In after-hours trading, shares of the Atlanta, Ga., software company gained $1.17, or 9.9%, to $12.98.
The company now projects 2003 revenue of between $248 million and $260 million, and pro forma earnings of 57 to 65 cents a diluted share, it said after the closing bell Thursday.
Internet Security Systems made modest year-over-year increases in earnings and revenue during the first quarter of 2003, the company also announced.
Revenue was $59.4 million in the March quarter, a 2% increase over the same quarter last year, the company said. Earnings calculated under generally accepted accounting principles were $5.36 million, or 11 cents a diluted share, compared to net income of $3.37 million, or 7 cents a diluted share in the year-ago quarter.
Revenue in the first quarter was helped by a "seven-figure" contract to provide network security software for the U.S. Navy and the Marine Corps.
Pro forma income was $6.47 million, or 13 cents per share, compared to $4.72 million, or 10 cents a diluted share a year ago.
The company's quarterly results were roughly in line with revised guidance it issued in early April.
In January, the company said investors could expect the company to earn 65 to 75 cents a share on revenue of $267 million to $285 million in 2003. CEO Tom Noonan said in a call with analysts and reporters today that the scaled-back guidance was prompted by "protracted weakness affecting the entire market."
Walter Pritchard, an analyst with Soundview Technology, said, "My own estimates -- and probably those of some other analysts -- were at what turned out to be the low range of the company's
new projection. You could interpret their guidance to mean that business is better than they thought -- or that they're being too aggressive." (Soundview has no banking relationship with ISS.)