Business software maker BMC Software Inc forecast a lower-than-expected profit for the current year after reporting third-quarter results below Wall Street estimates due to lower license bookings at its enterprise services management (ESM) and mainframe service management (MSM) businesses.
Shares of the company fell about 8 percent to $40.99 in extended trading, after closing at $44.48 on Monday on the Nasdaq.
"In the ESM business, we ... experienced slipped transactions, which were mainly larger and more transformational in nature," Chief Financial Officer Steve Solcher said in a statement.
The ESM business, which helps companies manage networks, databases and storage, brings in two-thirds of BMC's total revenue.
The company also said it lost out on two "large" renewal deals in the MSM business during the third quarter ended December 31 but hopes to close them in the current quarter.
BMC expects an adjusted profit of $3.35 to $3.45 per share for the full year. Analysts were expecting $3.56, according to Thomson Reuters I/B/E/S.
BMC, which competes with Oracle Corp, SAP AG, CA Inc and Compuware, was under pressure from Paul Singer's activist hedge fund Elliott Management to sell itself last year. Reuters reported in October that it was exploring a sale.
The company later said it had weighed strategic options and would buy back $1 billion in stock.
Net income fell to $106 million, or 70 cents per share, in the third quarter from $119.9 million, or 71 cents per share, a year earlier. Excluding items, the company earned 99 cents per share.
Revenue rose 6 percent to $580 million.
Analysts on average had expected an adjusted profit of $1.01 cents per share, on revenue of $587.4 million.
(Reporting By Aditya Kondalamahanty in Bangalore; Editing by Maju Samuel)