Progress Software Adj. Profit Tops Street, Cuts Sales Guidance; Stock Down 12%

(RTTNews) - Progress Software Corp (PRGS) on Thursday reported third-quarter net loss of $4.1 million or $0.08 per share compared with a profit of $11.1 million or $0.22 per share last year.

Excluding items, adjusted earnings for the quarter were $0.39 per share. Analysts polled by Thomson Reuters estimated earnings of $0.37 per share for the quarter. Analysts' estimates typically exclude special items.

Gross margin slid to 84% from 90% a year ago, and operating margin fell to 9% from 25%.

Revenues for the quarter were up 19% at $94.6 million compared with $79.3 million in the prior year.

Adjusted revenues for the quarter totaled $100.7 million, while analysts expected $104.3 million.

For the fourth quarter, the company expects adjusted earnings of $0.47 to $0.51 per share on adjusted revenues of $113 million to $118 million. Analysts expect earnings of $0.47 per share on revenues of $121.6 million.

For the fiscal year 2015, the company expects adjusted earnings of $1.51 to $1.55 per share on adjusted revenues of $410 million to $415 million. Earlier it expected earnings of $1.45 to $1.52 per share on revenues of $415 million to $425 million.

Analysts expect earnings of $1.49 per share on revenues of $420.8 million for 2015.

The company said its guidance includes the impact of a stronger dollar.

Progress also announced a new $100 million share repurchase program.

Separately, Progress said it is making changes to its operations to enhance integration and collaboration across its product divisions in order to address expanding market opportunities and to further advance its growth strategy.

This announcement follows the appointment of Jerry Rulli to the position of Chief Operating Officer in July. Today's changes are designed to align the company's operations around a cohesive, audience-centered approach and a strategic product management organization. To that end, Michael Benedict, previously President of the Data Connectivity and Integration Business Unit, has been appointed Chief Product Officer, effective immediately and will report into Rulli.

In his new role, Benedict is responsible for product marketing and product management across the Progress Application Development and Deployment, Data Connectivity and Integration, and OpenEdge Business Units.

In order to ensure tighter integration between the company's product management, marketing and development functions, Progress also announced that corporate marketing, under the direction of Melissa Puls, Chief Marketing Officer, and engineering and development, under the direction of Rob Steward, Chief Product Development Officer, will report to Rulli, effective immediately.

Progress' sales resources will report directly into the company's geographic regions under Rulli, while retaining the dedicated business unit sales teams for each of the products.

Progress expects to retain the segment reporting for its three business units.