January 29, 2014 / 11:36 PM / in 4 years

UPDATE 1-Citrix's profit forecast misses on "uneven" contract closures

(Adds forecast, updates share movement)

Jan 29 (Reuters) - Cloud-computing software maker Citrix Systems Inc forecast current-quarter and 2014 earnings far below analysts’ estimates, citing “uneven” closure of some contracts, and said its long-time CEO would retire next year.

Citrix shares fell 5 percent in extended trading.

Chief Financial Officer David Henshall said mid-sized contracts in its desktop virtualization business were being affected due to the growing adoption of mobile devices in workplaces.

Virtualization software from Citrix and larger rival VMware Inc enables the creation of a virtual machine that acts like a real computer with an operating system. This helps companies use server and storage space more efficiently and reduce IT costs.

Citrix forecast adjusted earnings of 57-60 cents per share for the first quarter. Analysts on average were expecting 69 cents per share, according to Thomson Reuters I/B/E/S.

It expects adjusted earnings of $2.85 to $2.95 per share for 2014, below analysts’ average estimate of $3.35 per share.

Citrix also said its adjusted tax rate would increase to 24 percent from 20 percent, largely due to a federal research and development tax credit not having been extended yet by Congress.

The company said Mark Templeton, its CEO for nearly 13 years, plans to retire within the next year.

Templeton has been on leave since mid-October following the death of his youngest son. The company said he would rejoin next month.

The company said it expected current-quarter revenue to increase by 8 percent to 10 percent, implying revenue of $799.2 million to $813.9 million.

Citrix’s fourth-quarter revenue rose 8 percent to $802.4 million but missed analysts’ average forecast of $805.4 million.

Product and license sales grew less than 1 percent to $269.9 million. Sales had jumped 17 percent a year earlier.

Net income rose to $138.6 million, or 74 cents per share, in the fourth quarter ended Dec. 31, from $114 million, or 60 cents per share, a year earlier.

Excluding items, the company earned $1.04 per share.

Analysts on average had expected earnings of 98 cents per share.

Citrix shares were at $54.65 in extended trading after closing at $57.60 on the Nasdaq on Wednesday. The company’s stock has lost 13 percent in the last six months. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila, Maju Samuel)

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