Compuware Corporation (CPWR) reported revenues of $229.8 million in the third quarter of fiscal 2010, down 14.4% from a year ago.
During the quarter, software license fees came in at $52.0 million, down 0.02% from a year ago, 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 $117.6 million in the quarter, up 8.4% from a year ago (excluding divested products). Revenue from professional services in the quarter was $60.3 million, down 34.1% year over year.
Covisint (Compuware markets its application services under the brand name Covisint) reported revenues of $10.8 million, up 22% year over year. In the reported quarter, Covisint added 71 new customers including global players like AT&T (T).
During the reported quarter, 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.
Management stated that 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.
Operating expenses increased 4.4% sequentially to $193.8 million. The majority of this increase was concentrated in sales and marketing expense related to annual bonuses as well as marketing investments intended to drive demand. Earnings per share (EPS) came in at 12 cents, in line with the Zacks Consensus Estimate.
During the quarter, the company generated $33.4 million of cash from operations and repurchased approximately 3.5 million shares for $25.4 million. Year-to-date, Compuware repurchased approximately 15.1 million shares for about $111.2 million. Compuware ended the quarter with cash and equivalents of $87.8 million. Going forward, management expects to generate $200 million in fiscal 2010.
The results had a minimal impact on the share price. In after-hours trading, shares of Compuware increased 1.41% to close at $7.90. (In regular-hours trading, shares closed at $7.79).
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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