Compuware Corporation (CPWR) reported revenues of $225.9 million in the second quarter of fiscal 2011, up 3.6% year over year and up 9.4% sequentially. The revenues were above the Zacks Consensus Estimate of $224 million.
Michigan-based Compuware Corporation provides software products and professional services to many of the largest users of information systems across the world.
On a segment basis, revenues from software license fees declined 9.0% to $45.6 million. Revenues from maintenance and subscription fees came in at $122 million, up 11.2% from the year-earlier quarter. Revenues from professional services increased 0.3% year-over-year to $58.3 million.
Covisint (Compuware markets its application services under the brand name Covisint) revenues increased 27% year over year to $12.2 million as both healthcare and manufacturing verticals show strength.
Compuware earlier divested a few of its peripheral products and services (Quality family of products and DevPartner software). The company plans to concentrate on its software business and deliver superior end-to-end application performance, called Business Service Delivery.
Management expects that the rapid growth of its application performance management (APM) and secure collaboration businesses will diversify the company’s revenue mix by adding recurrent revenue and additional visibility. This revenue shift to more distributed and subscription base revenue bodes well for the company. Total APM revenues (consisting of Vantage and Gomez solutions) grew 25.8% year over year. Vantage license fees are up 48.1% and Gomez subscription fees up 29.6%.
Cisco Systems (CSCO) recently selected Compuware to provide APM solutions to its UCS platform, Cisco’s next generation computing platform.
Operating expenses came in at $185.0 million, up 4.6% year over year but below management’s forecast of $195 million and $200 million. As a result, net income declined 7.1% year over year to $25.9 million despite revenue growth.
EPS of 12 cents was flat with the year-ago quarter due to lower number of shares outstanding. During the quarter, Compuware repurchased approximately 5.5 million shares for about $42.9 million. The reported figure easily beat the Zacks Consensus Estimate of 10 cents.
Going forward, Compuware feels confident about its business. Management expects revenues of $950 million in fiscal 2011. EPS is projected between 48 cents and 56 cents for fiscal 2011.
Operating expenses are estimated around $195 million to $200 million for the next two quarters. For the third quarter, Compuware estimates revenues between $240 million and $260 million. EPS is forecasted at 14 cents – 16 cents.
The better-than-expected results impressed investors. Shares of Compuware were up 5.33% and closed at $9.29 in after-hours trading. In regular trading, shares were up 1.03% and closed at $8.82.
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