Compuware Corp. (CPWR) reported revenues of $230 million in the fourth quarter of fiscal 2010, up 9.2% from year-earlier period.
Software License fees came in at $51.8 million, up 2.9% year over year (excluding divested products). 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.
Maintenance and subscription fees were $117.9 million for the quarter, up 13.4% year over year (excluding divested products). Revenue from professional services in the fourth quarter was $60.3 million, down 30.1% from the year-earlier period.
Covisint (Compuware markets its application services under the brand name Covisint) reported revenues of $10.4 million, up 15% year over year. Billings grew 39.5% year-over-year to $16.9 million. Total backlog (signed agreements that are being delivered over the next five years) grew 13% sequentially to $85.2 million. The company closed 15 agreements with enterprise internet customers.
Net income came in at $37.4 million or 16 cents per share, compared to $48.4 million or 20 cents in the year-earlier period. The reported net income per share easily beat the Zacks Consensus Estimate of 14 cents.
Fiscal Year 2010 Results
Revenues for fiscal 2010 came in at $892.2 million, down 18.2% year over year. Net income came in at $140.8 million or 60 cents per share compared to a net income of $139.6 million or 55 cents in fiscal 2009.
Guidance
Moving forward, management expects revenues within the range of $950 million to $1,000 million. Net income per share is projected between 48 cents and 56 cents.
In fiscal 2010, Compuware completed its acquisition of privately held Gomez Inc. for $295 million in cash. Gomez is a leader in Web application experience management and its clients include Google (GOOG) and Facebook.
The acquisition of Gomez makes Compuware the only provider of a single dashboard that optimizes application performance across the Web, the Cloud and the enterprise. Management stated that this unique value proposition will help the company win customers. Revenues from Covisint are projected to grow 30% – 35% driven by almost a 45% growth in its health care business year over year.
This trend is expected to grow driven by the federal stimulus program for healthcare IT as large health information exchange purchasing decisions are made over the next 12 months. The company has solid partnerships with AT&T (T) and the American Medical Association.
For the first quarter, management expects earnings per share at around 5 – 7 cents as the business experiences normal seasonality. However, EPS will pick up in the third and fourth quarter as the growth drivers gain momentum with market penetration simultaneously.
Headquartered in Detroit, Michigan, Compuware provides software products and professional services to many of the largest users of information systems in the world.
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