Repost: Rational rises 20 pct on strong Q2 earns
Reuters Story - October 15, 1998 22:09
NEW YORK, Oct 15 (Reuters) - Shares of Rational Software Inc. jumped 22 percent on Thursday, boosted by better-than-expected second quarter earnings, and the company's plan to buyback up to 7 percent of its shares.
The Cupertino, Calif.-based maker of software development and testing tools climbed 3-3/8 to 18-1/8 by Thursday afternoon, just shy of its 52-week high of 18-15/16.
On Wednesday, Rational reported net profits of $12.2 million, or about $0.14 a share, on revenues of $94.6 million, compared to a loss of $64.6 million a year ago, or $0.74 a share, on revenues of $74.9 million.
Rational also approved a buyback plan for up to six million common shares. The company has about 86.72 million shares outstanding, as of Sept. 9 according to S & P Marketscope.
Credit Suisse First Boston analyst Wendell Lansky, in a research note reiterating his buy rating, said the quarterly profits exceeded his expectations by two cents, and noted that the results could have been even stronger.
"We believe that September was a 'highly managed' quarter for the company, meaning that results could have shown even more upside, had management not chosen to maintain its focus on consistently meeting or exceeding expectations over the longer term," he said.
Rational's new Performance Studio product generated $5 milliion bookings in the quarter, none of which was recognized as revenue, Laidley said.
Laidley raised his projection for fiscal 1999 earnings per share to $0.59 from $0.53, with revenues expected to reach $395 million.
Laidley noted that the company has experiecned no materially negative effects from the financial troubles in Russia and Asia. Rational Software's stock is attractive because of its upside potential and anticipated multiple expansion based on accelerating growth rates, he added.
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BTW, does anybody know what has happened to diane g.? I haven't seen her around here in a long time. |
