The software maker attributes its weak first-quarter results to the uncertain macroeconomic environment and currency headwinds.
HOUSTON (TheStreet) -BMC Software(:BMC), like many tech firms, showed the strain of both macroeconomic pressure and currency headwinds when it reported below-consensus quarterly results after Tuesday's closing bell.
The software maker's revenue came in at $504.4 million, flat compared to the same period last year, or up 2% on a constant currency basis. Analysts surveyed by Thomson Reuters were looking for a top-line total of $521.8 million.
Excluding items, BMC earned 65 cents a share, down from 72 cents a share in the prior year's quarter, and missing the average analysts' estimate of 74 cents a share.
BMC CEO Bob Beauchamp told TheStreet the performance of the company's Enterprise Service Management (ESM) division hurt the top-line numbers. "What we're talking about is an ESM license number coming in $12 million short of what we expected," he explained. "Roughly half of that was related to foreign currency and macro factors -- the other half was related to our ESM sales transformation."
Beauchamp nonetheless highlighted strength in the company's cloud business, which grew 95% year-over-year and now makes up almost 25% of ESM revenue. "Our growth engines are working very well," he said.
Mainstream Service Management (MSM), which makes up 40% of the company, also enjoyed a solid quarter, according to the CEO, with revenue up 1% compared to the same period last year. BMC's professional services revenue grew 12% year-over-year, he added.
BMC reiterated its fiscal 2013 outlook for earnings of $3.49 to $3.59 a share, a 9% increase on the same period last year.
The company, however, lowered its year-over-year revenue growth projection from mid-to-high single digits to mid-single digits, or mid-to-high single digits adjusted for the effects of currency.
BMC also adjusted its total bookings growth guidance from mid-to-high single digits to mid-single digits, or mid-to-high single digits on a constant currency basis.
The company's first-quarter numbers and guidance pushed its shares down 2.78% to $38.50 in extended trading on Tuesday.
BMC has also been in the spotlight in recent months thanks to activist investor Elliott Associates' attempt to push for a sale of the company.
Elliott Associates initially nominated five people for BMC's board. After negotiations, BMC agreed to add two new members, John Dillon and Jim Schaper.
"We're pleased with the agreement with Elliott," said Beauchamp, saying that BMC's board has been extended from 10 to 12 directors. "We have a talented, experienced and diverse board - the addition of Mr. Dillon and Mr. Schaper adds to this strength."
"While our focus remains to execute our strategy to be the leader in enterprise IT management, we're always reviewing numerous avenues to build value for our shareholders," he added.
--Written by James Rogers in New York.
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