It said preliminary estimates indicate revenue will be between $100m and $102m, 23% above last year’s level, with earnings per share before exceptional items of $0.04 for the second quarter to May 27.
While the growth appears respectable, the consensus of analysts surveyed by Thompson First Call was for revenue of $108m and earnings per share of $0.06. Tibco blamed a handful of missed million-dollar deals in the US and the financial services sector.
We had half a dozen deals, mostly in North America, that slipped into the future, CEO Vivek Ranadive told analysts. Demand in financial services remains very strong… but we did have a couple of significant deals in that sector that did not close this quarter.
These deals turned out to require more process and more scrutiny than I’ve seen in the past, Ranadive said. CIOs who would normally be able to sign off on seven-figure deals found themselves having to run the purchases past their bosses, he said.
The weakness in North America and financial services suggests Tibco may have overcompensated when it acted to rectify its poor first quarter, which was blamed on lack of execution in certain geographic areas, particularly in Europe.
One action the company took was to move Robin Gilthorpe, head of financial services sales in the US, to head the European business, but Tibco denied that it had neglected America and financial services in its hurry to patch up its European business.
There was the possibility that taking Robin in financial services and moving him to Europe may have had the risk of derailing momentum in financial services, Ranadive acknowledged in a conference call with analysts.
Tibco has been growing strongly, benefiting from its April 2004 of Staffware, which took it deep into the business process management market, which cost it $217 but helped net income for its last fiscal year rise 59.3% to $18.2m on revenue up 46.6% at $387.2m.
While Tibco benefited from the glow of market approval last year, its share price has nosedived from $13.50 at the start of 2005 to $5.78, 8.59% lower when the market opened yesterday, valuing the company at $1.25bn.
Yesterday’s news that the company has missed targets for the second quarter in a row will bring joy only to those law firms planning class action suits against the company for missing to its targets for the last quarter.
The usual suspects in the stockholder class action business are circling the company, claiming Tibco misled investors in the run-up to its first-quarter profit miss on factors of the business such as the Staffware integration.
