Tibco Software

(TIBX)

reported first-quarter earnings Wednesday in line with Wall Street estimates and revenue that came in a little short of expectations. The company also reaffirmed guidance for the full year.

Palo Alto, Calif.-based Tibco said it earned $3.4 million, or 2 cents a share, on revenue of $74 million in the fiscal first-quarter ended Feb. 28. In the same period a year ago, the integration software maker broke even on $82.1 million in revenue.

Tibco reported net income of $9.4 million, or 4 cents a share on a pro forma basis, which excludes stock-based compensation charges and amortization of goodwill and intangibles. Last year, the company earned 6 cents a share on a pro forma basis. The consensus estimate on Wall Street was for earnings of 4 cents a share on $77 million in revenue, according to Thomson Financial/First Call.

On a conference call, Chief Financial Officer Chris O'Meara said the company feels comfortable with second-quarter Wall Street estimates of $82 million in revenue and 4 cents in pro forma earnings. That's slightly less than the $81 million consensus estimate for second-quarter revenue gathered by Thomson Financial/First Call. O'Meara also reaffirmed guidance of between $330 million and $350 million in revenue and pro forma earnings ranging from 16 cents to 20 cents a share for the fiscal full year, which ends in November. The consensus estimate gathered by Thomson Financial/First Call is earnings of 19 cents a share on $337 million in revenue.

"From our perspective, we think the market has bottomed. I think that on the one hand people are continuing to hold the line on capital expenditures, but they are investing in integration software, so that's why we're not changing guidance moving forward," said Tibco Chairman and CEO Vivek Ranadive. "The first quarter has always been a hard quarter for us because so much of it gets taken up at the holiday season. We think the worst is definitely behind us."

Sequentially, revenue in the seasonally weak first quarter fell 5.4% from $78.2 million in the fourth quarter and pro forma earnings remained flat.

First-quarter license revenue totaled $46.9 million, compared with $58.3 million a year earlier and $50.6 million in the fourth quarter.

"The top line is a bit light," said Ken Kiarash, an analyst with Buckingham Research Group, who expected revenue of $78.5 million. "Maybe a couple of deals did not close at the end of the quarter and that may have caused it." Kiarash has a strong buy rating on Tibco, and his firm hasn't done any business with the company.

While revenue fell short, Kiarash pointed to a few positive signs. Days sales outstanding fell to 67 from 69 in the fourth quarter, while deferred revenue rose to $43.2 million from $41.3 million in the fourth quarter.

The company's operating margin also improved, rising to 9.5% from 6.7% in the fourth quarter. Tibco executives said that number should continue to increase. "We feel very confident we can be in the 20s long term with this model," Ranadive said.

Earlier this week, Tibco, which is majority-owned by

Reuters

(RTRSY)

, said the U.S. Justice Department has requested additional information related to its pending acquisition of

Talarian

(TALR)

, valued at about $115 million. The waiting period to complete the deal will expire 30 days after substantial compliance with the request for information, unless it is terminated earlier by the Justice Department.

Tibco's shares fell 29 cents, or 2.2%, to $12.87 in regular session trading Wednesday before its earnings announcement. After announcing its results, shares fell to $11.82 in after-hours trading.