Updated from June 20
set a 52-week low intraday Friday after the integration software maker reported financial results a day earlier that fell slightly short of reduced Wall Street estimates and offered guidance also short of expectations.
Shares of Tibco fell as low as $4.80, down 28 cents, or 5.5%, before bouncing up to the $5 mark in recent trading. That bottom was several pennies lower than the previous 52-week intraday low of $4.86 on June 5, a day after the Palo Alto, Calif., company warned of disappointing second-quarter results. The company's stock has lost 66% of its value since the beginning of the year.
In a note Friday, Stifel, Nicolaus analyst C. Gregg Speicher predicted other integration vendors will probably preannounce in early July. Speicher maintained his buy rating on Tibco, arguing the company is in a strong position to take market share when the IT market recovers. His firm hasn't done any banking with Tibco.
In recent trading, integration software maker
, was up by 14 cents, or 1.8%, to $8.04, and rival
was down 1.2%.
Despite Tibco executives' somber tone on a post-close conference call Thursday, other analysts also maintained their buy ratings on the company.
"From any angle, it was an ugly quarter for TIBX," UBS Warburg analyst Jordan Klein said in a note Friday. Klein lowered his third-quarter revenue estimates below the guidance given by Tibco, citing seasonal summer weakness and sales force disruptions.
Still, Klein said he was sticking by his buy rating with a six- to 12-month view because of his expectations of a rising focus on integration software, market share gains by Tibco at the expense of weaker players, the company's ability to leverage $650 million in cash and equivalents, and gradual traction from a new product targeted at the mid-market. Klein's firm hasn't done any banking business with Tibco.
Less confident of Tibco, Legg Mason analyst Paul Krieg maintained his hold rating.
"The stock isn't expensive, but we believe that the lack of catalysts and the risk of a stumble in the sales organization limit the attractiveness," said Krieg, whose firm hasn't done banking business with Tibco.
Krieg said the company's sales force has thinned out by about 10% as part of a recent 5% reduction in the overall workforce. He said he is also concerned about the departure of Tibco's head of sales at the beginning of the current quarter.
On a conference call Thursday, Chief Financial Officer Chris O'Meara predicted third-quarter revenue would be comparable to the second quarter and pro forma earnings would range from break even to a loss of 1 cent a share. The company declined to give guidance for the fourth quarter and full year. The consensus estimate on Wall Street was for Tibco to earn 1 cent a share in pro forma net income on $63.9 million in revenue in the third quarter.
Tibco reported a net loss according to generally accepted accounting principles of $56 million, or 27 cents a share, on revenue of $64.1 million in the second quarter, which ended May 31. Excluding charges, Tibco reported a pro forma net loss of $2.9 million, or a penny a share.
Analysts' reduced estimates forecast Tibco would break even on a pro forma basis on revenue of $65.1 million, according to Thomson Financial/First Call. The company's majority shareholder is Reuters.
In the second quarter last year, Tibco registered a net loss of $17.8 million, or 9 cents a share, on $84.4 million in revenue. Excluding charges, Tibco reported pro forma net income of 4 cents a share in the year-ago quarter.
Second-quarter revenue fell 13.4% sequentially, from $74 million in the first quarter; GAAP earnings went to a net loss from net income of $3.4 million in the first quarter.
Tibco's earnings missed the numbers the company released on June 4 although revenue was in line with the new guidance. At that time, Tibco warned it expected to report a second-quarter net loss of between 18 cents to 23 cents a share on revenue ranging from $63 million to $65 million.
In the company's earnings call in March, O'Meara said the company was comfortable with second-quarter Wall Street estimates of $82 million in revenue and 4 cents in pro forma earnings. Although Tibco slightly missed Wall Street revenue estimates the first quarter, the company did not lower second-quarter or full-year guidance, in contrast to other software makers.