ENTU stages third-quarter recovery
(UPDATE: All figures in U.S. dollars unless noted.)
By Susan Taylor
OTTAWA, Oct 17 (Reuters) - Entrust Technologies Inc. (NasdaqNM:ENTU - news), a maker of security software for computers, reported on Tuesday that its third-quarter results beat analyst estimates by two cents a share while showing a turnaround from a loss the previous period.
Entrust reported net earnings from operations of $1.2 million, 2 cents per share, on sales of $42.2 million versus the year earlier profit of $2 million, 4 cents per share, on revenues of $22.6 million.
The average estimate from 15 brokers polled by First Call/Thomson Financial was zero cents per share.
Including acquisition costs, Entrust reported a net loss of $28.8 million or 46 cents per share.
The Plano, Texas-based company, which has its research and development operations in Ottawa, is best known for its public-key infrastructure, or PKI, software. That is used to to positively identify computer in electronic commerce.
``The key success factor in the quarter was really the diversity that we drove,'' chief executive John Ryan told Reuters. ``The area we're especially proud of was the incredible focus and attention we put on our mid-range deals -- they increased 90 percent quarter over quarter.''
Mid-range deals are valued at $5,000 to $50,000.
Entrust's reliance on large customers tripped up its second-quarter performance when several deals failed to close on time.
The company's five largest deals, valued at $500,000 or more, represented 24 percent of sales in the third quarter, down from 28 percent in the second quarter and 32 percent in the first.
Ryan said he expects large deals to slip below 20 percent of the company's revenue next year.
The healthier financial results follow a dismal second quarter, when a profit warning led to a string of analyst downgrades and a stock market drubbing.
Some analysts have since revised their projections. Sands Brothers & Co. Ltd. analyst David Zale upgraded his rating to buy from neutral in late September based on new partnerships and deals.
Shares in Entrust slipped $1-1/16 on the Nasdaq to end at $22-1/2 in advance of the financial results amid a market routing for technology issues. The stock has dropped from a 52-week high of $150 to a low of $19-12/16.
($1 equals $1.52 Canadian) |
