(Adds details, background, analysts' comments; updates share
By Neha Alawadhi and Aditya Kondalamahanty
Oct 9 Cloud computing software maker Citrix
Systems Inc estimated quarterly results below analysts'
expectations as businesses delayed contracts, sending its shares
down as much as 14 percent in extended trading.
Cloud computing companies such as Citrix and VMware Inc
have been facing delays in closing large deals as
customers review IT budgets to prune discretionary spending.
Citrix's warning could set the tone for other software
companies as it comes just ahead of the third-quarter reporting
season. VMware shares fell 3.3 percent after the bell.
Cloud computing software allows customers to access
applications remotely from a central server, and reduces costs
by eliminating the need to upgrade and install software on each
individual computer on site.
"It has been a soft spending environment for infrastructure
software companies as seen recently by Oracle Corp and
Red Hat Inc," FBR Capital Markets analyst Daniel Ives
said. "Citrix is the latest victim."
In September, Oracle forecast sales and profit below
expectations for the quarter ending Nov. 30, while Red Hat said
it was under pressure to maintain billings growth.
Citrix's profit and revenue estimates for the third quarter
came in below its own forecast issued in July.
Analysts said the weak outlook indicated that sales of the
company's networking products, which helped it beat estimates in
the second quarter, could be slowing down.
"I think when you have a miss of $25 million, it raises the
concern that the weakness has spread to the networking
business," said Raymond James analyst Michael Turits.
The networking business, which makes products that help
improve the performance of Web applications, accounted for about
23 percent of Citrix's sales in the second quarter.
The company, scheduled to report third-quarter results on
Oct. 23, said it expects adjusted earnings of 68-69 cents per
share on revenue of $710 million-$712 million.
Analysts on average had expected earnings of 73 cents per
share on revenue of $737.3 million, according to Thomson Reuters
Citrix shares were down 14 percent at $57.51 after the bell.
(Editing by Saumyadeb Chakrabarty)