Informatica Shares Fall as Sales Miss Estimates

Friday, 06 Jul 2012 11:12 AM

 

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Shares of Informatica Corp. slumped the most in 11 years Friday after the provider of corporate data-integration reported second-quarter earnings and revenue that unexpectedly dropped, missing analysts’ estimates.

The shares declined 35 percent to $28.12 at 10:16 a.m. New York time, the biggest intraday decrease since July 2001. The Redwood City, California-based company had gained 17 percent this year through Thursday.

Informatica said results trailed its own expectations, because it didn’t adapt as rapidly as it should have to a downturn in demand, especially in Europe. Although information- technology budget tightening partially explains the shortfall, more than half of the miss was specific to Informatica, said Karl Keirstead, an analyst at BMO Capital Markets.

“Our point is that a tough macro backdrop likely made things much worse, but that Informatica’s results and tone have been weakening for several quarters now,” Keirstead, who rates the shares market perform, said in a note to investors.

Sales fell to about $188 million to $190 million in the period ended June 30, and earnings before certain items dropped to 27 cents to 28 cents a share, Informatica said in a statement yesterday after the markets closed. Analysts anticipated $217.4 million in revenue and 36 cents in earnings-per-share, according to predictions compiled by Bloomberg.

Shares of other software makers fell. Teradata Corp., based in Dayton, Ohio, dropped as much as 10 percent to $65, the biggest intraday decline since December. MicroStrategy Inc. declined as much as 10 percent.

In Europe, Software AG and SAP AG also slid. Software companies will probably lower full-year forecasts amid negative macro-economic data, Daud Khan and Jean Beaubois, two Berenberg Bank analysts, wrote in a note.

Informatica will report complete second-quarter results on July 26. In the second-quarter last year, the company posted revenue of $192.7 million on earnings-per-share of 33 cents, excluding items such as costs and tax benefits related to the amortization of acquired technology and intangible assets and stock compensation.

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