Progress Software Q2 Profit Rises, Lifts FY Outlook; Shares Surge

(RTTNews) - Progress Software Corp. (PRGS) Thursday reported a surge in profit for the second quarter, helped by lower operating costs as revenues dropped marginally, with both earnings and revenues coming in ahead of Wall Street estimates. Shares of the business software maker surged 10 percent in extended trade after the company lifted its full-year earnings outlook.

Bedford, Massachusetts-based Progress Software's second-quarter profit rose to $12.80 million or $0.25 per share from $3.91 million or $0.07 per share last year.

Adjusted earnings from continuing operations for the quarter rose to $0.37 per share from $0.27 per share last year. On average, four analysts polled by Thomson Reuters expected earnings of $0.34 per share. Analysts' estimates typically exclude special items.

Progress Software, which competes with the likes of Tibco Software, said revenues for the quarter dropped 1 percent to $80.83 million from $81.71 million last year. Four analysts had a consensus revenue estimate of $78.46 million for the quarter.

Commenting on the results, CEO Phil Pead said, "We are pleased with our second quarter performance. Progress continues to add new features and functionality to its core products while also introducing new offerings, such as comprehensive mobile app development capabilities in our Pacific PaaS platform."

Total costs of revenue for the second quarter dropped 13 percent to $7.38 million, while operating costs dropped 10 percent to $53.17 million.

Looking forward to the third quarter, Progress Software expects adjusted earnings of $0.32 to $0.35 per share with revenues of $78 million to $81 million. Analysts currently see earnings of $0.33 per share on revenues of $79.61 million for the quarter.

For the fiscal year 2014, the company raised its adjusted earnings to a range of $1.38 to $1.45 per share from its prior outlook of $1.37 to $1.43 per share. Progress maintained its revenue outlook of $331 million to $338 million. Analysts currently expect earnings of $1.38 per share and revenues of $326.28 million for 2014.

PRGS closed Thursday's trading at $22.24, down $0.01 or 0.04%, on the Nasdaq. The stock, however, gained $2.16 or 9.71% in after-hours trade.