MERQ ($22-$24)..PE=85.9...in-line on EPS and revs..4 upgrades the next day..
17-Oct-02
16:49 ET Mercury Interactive matches estimates (MERQ) 23.24 +1.91: Reports Q3 (Sep) earnings of $0.16 per share, in line with the Multex consensus of $0.16: revenue for the third quarter was $97.9 million vs consensus of $97.2 million.
Reuters
Mercury Interactive swings to profit
Thursday October 17, 7:23 pm ET
By Ilaina Jonas
(adds ceo, analyst quote, outlook, updates stock price, previous SUNNYVALE, Calif.)
NEW YORK, Oct 17 (Reuters) - Mercury Interactive Corp.(NasdaqNM:MERQ - News), maker of products for software testing and monitoring, on Thursday reported third-quarter net income versus a year-earlier loss as revenues rose 16 percent.
ADVERTISEMENT
The Sunnyvale, California-based company, with operations in Israel, has been able to capitalize on the prolonged downturn in technology spending because its network and software testing and monitoring products help customers get the most out of the software they already have.
"Overall, peoples' focus is not about new stuff but in getting value from the past investment, getting more efficient and saving costs," Amnon Landan, Mercury Interactive chief executive officer, told Reuters. "Every single one of our offerings address those desires.
Mercury reported a net profit of $13.3 million, or 15 cents a share, compared with a net loss of $7.1 million, or 9 cents per share, a year earlier.
Revenue rose 16 percent to $97.9 million from $84 million in the prior year.
"They don't really have a direct competitor in testing that's large," Goldman Sachs analyst Thomas Berquist said of the part of the business that accounts for 80 percent of Mercury's overall revenue.
Mercury's performance and measurement business for applications grew close to 40 percent compared with last year. Most of the deals come to $65,000 or less, making them attractive to department heads.
"They do compete with other systems management companies in that space but the other companies sell much larger" deals for the entire enterprise, Berquist said.
"Mercury can sneak in and pick off business," he said.
Excluding amortization of goodwill and restructuring charges and other one-time items, the company said it earned $14.2 million, or 16 cents a share, in the third quarter, compared with $9.8 million, or 11 cents a share, a year earlier.
Analysts, on average, expected the company to earn 16 cents a share excluding charges, with 26 estimates ranging between 14 cents to 17 cents a share.
For the fourth quarter, the company said in a conference call with analysts that it expects per share earnings between 17 cents to 22 cents a share on revenue between $105 million to $115 million. Analysts, on average, expect the company to earn 20 cents a share on revenue of about $106.5 million.
Landan said that the economy still remains unpredictable and said if the traditional fourth-quarter buying spree occurs, revenue will fall in the higher range. If not, revenue will be closer to $105 million.
Shares of Mercury Interactive on Thursday closed at $23.24, up $1.91, or about 9 percent. In after-hours activity on Instinet, shares traded at $23.35.
Since the beginning of the third quarter, shares of Mercury Interactive shares have gained 7 percent of their value and have outperformed the Goldman Sachs software index by 16 percent.
Email this story - Set a News Alert
ADVERTISEMENT |
