BroadSoft Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: 2010 IPO BroadSoft (Nasdaq: BSFT  ) defied a market sell-off and popped 24% in intraday trading today after the company issued better-than-expected earnings and guidance.

So what: The stock plunged 19% Friday as talk that communications demand has been weak was exacerbated by fears that the economy is slowing. Non-GAAP EPS of $0.29 was almost triple the $0.10 consensus estimate and reversed a loss of $0.03 per share in the year-earlier quarter. Revenue of $32 million grew an impressive 63% year over year and was well ahead of the $29 million expected by some analysts.

Now what: For the current quarter, management expects non-GAAP EPS of $0.20 to $0.23 and revenue of $31 million to $33 million, shaming consensus expectations of $0.10 and $29 million, respectively. For 2011, management raised guidance to non-GAAP EPS of $0.90 to $0.95 and revenue of $127 million to $130 million, massively above consensus expectations of $0.66 and $125 million, respectively. It's also far head of non-GAAP EPS of $0.48 in 2010. In May, management had guided 2011 to non-GAAP EPS of $0.67 to $0.77 and revenue of $121 million to $125 million.

Interested in more info on BroadSoft? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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