September 22, 2008

Progress Adjusts Outlook As Profit Dips

Progress Software has reported a 4% decline in net income in the third quarter to $12.53m on revenue that rose 4% to $126.62m.

Operating income during the quarter grew 2% to $18.1m, while diluted EPS remained flat at $0.30. The company repurchased 1.7 million of its shares during the quarter at a cost of $45.4m.

Software license revenue grew 5% to $46m, while maintenance and services revenue grew 4% to $80.62m over the same period last year.

The company also acquired middleware vendor Iona Technologies for $162m and New Hampshire-based service-oriented architecture tools vendor Mindreef, during the quarter.

Joseph Alsop, co-founder and chief executive at Progress Software, said: "Our results for fiscal Q3 were solid, with strong profitability, despite the increasing turmoil in certain markets we serve, with strong performance delivered by our Apama, DataDirect, and DataXtend Semantic Integrator product lines."

However, he said that based on the less certain outlook and recent strengthening of the US dollar relative to international currencies, the company is adjusting its outlook for the fourth quarter and fiscal year.

For the fourth quarter, it said it now expects revenue between $143m and $147m and diluted EPS between 10 cents and 14 cents. For fiscal 2008, it expects revenue between $519m and $523m and diluted EPS between $1.02 and $1.06.