Wall Street darling Citrix Systems, a Fort Lauderdale, Florida-based maker of application server software, on Monday announced that its second-quarter profits would be well below expectations. The warning drove the price of the company's stock down more than 50 per cent to a 52-week low at the close of Monday's trading.
Citrix -- which saw its annual sales shoot up 62 per cent to $US403.3 million last year -- on Monday said revenue growth in this year's second quarter may only reach 11 per cent. The company expects second-quarter revenues to come in between $US105 million and $110 million, compared with $94.4 million in the same three months of last year.
Citrix president and CEO Mark Templeton said profits for the quarter are likely to range from $16 million to $20 million, down from net income of $27.8 million in the same period last year. Financial analysts who track the company had been forecasting average earnings of about $38 million in this year's second quarter, according to First Call/Thompson Financial in Boston.
In Monday's announcement, Citrix blamed several factors, including a slower-than-expected expansion of its business within large corporate accounts. Sales in Asia were also below plan, and the company said an ongoing transition to a new software licensing model is having a short-term negative impact on its revenues.
Templeton said in a statement that Citrix executives "are disappointed in the rate at which we are penetrating large enterprise accounts and new geographic markets". But, he added, the company remains "optimistic about the opportunities presented in the application serving market".
The price of Citrix's stock dropped from more than $41 to $18.94 yesterday, although it had climbed back up to nearly $24 in early trading today.
The second-quarter results are scheduled to be reported on July 19. After the warning, analysts at Prudential Securities in New York said they were reducing their earnings forecast for Citrix for all of this year from $US158 million to $91 million. Prudential said Citrix's products are solid but its sales force has had problems executing.