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A Mixed Bag of Results for Application Software Stocks
NEW YORK, NY, Feb 04, 2013 (MARKETWIRE via COMTEX) --
Amid the poor to terrible earnings reports from large tech stocks
across the board, application software companies like F5 Networks and
CA Technologies have returned decent earnings figures and bolstered
the swaying mood of the market to a certain extent. Although many
mega hedge funds habitually park money in some of the top software
provider stocks, individual investors are not too happy with how the
sector has performed lately.
Access our free reports on F5 Networks Inc. (NASDAQ: FFIV) and CA
Technologies (NASDAQ: CA). Traders can also connect to our Wall
Street Trading Floor where our research desk and market pros are
standing between 8:50 am to 4:15 pm ET at
http://www.ShinesRooms.com/FFIV020413.pdf
http://www.ShinesRooms.com/CA020413.pdf
F5 Networks provided lower-than-expected quarterly results as a
result of a slowdown in federal sales. However, the company forecast
second quarter adjusted profit above street estimates. The net income
of the company rose from $66.5 million or 83 cents per share to $69.5
million or 88 cents per share. F5's management reaffirmed the
forecast, assuring investors that the second half of fiscal 2013
would come out with relatively better results compared to Q1. The
market was bolstered by this positive guidance and the stock is
expected to see a strong and productive year.
CA had total revenue of $1.19 billion in its latest reported quarter.
This is a decline of 4% y-o-y when adjusted for currency, a decline
mainly resulting from a poorer market for mainframe solutions. This
figure was also down 5.0% from $1.26 billion in the year-ago quarter.
The drop in the top-line and bottom-line did not come as a surprise
to the people on the street. This quarter, CA had an operating income
of $370 million, while it had one that was 10% more in the quarter a
year ago, unadjusted for inflation.
CA provided a bleak guidance of negative 3% to negative 1% for total
revenue. Future guidance from the company includes the fact that IBM
and other major players are giving it stiff competition in the
software and cloud computing space. The company is also heavily
exposed to the downturn in the European economy, and has been forced
to reduce spending in R&D.
Despite optimistic guidance from software companies, shrinking of the
U.S. and EU economy is a major concern for the sector since much of
the earnings of this sector come from corporate products. The sector
as a whole has been forced to reduce operating income and R&D
spending, which will hurt the sector in the long-run.
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