Progress Software Beats Analyst Estimates on EPS

Progress Software (Nasdaq: PRGS  ) reported earnings on Jan. 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q4), Progress Software beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped, and earnings per share shrank significantly.

Margins contracted across the board.

Revenue details
Progress Software reported revenue of $136 million. The six analysts polled by S&P Capital IQ foresaw a top line of $134 million. Sales were 6.1% lower than the prior-year quarter's $145 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.34. The five earnings estimates compiled by S&P Capital IQ predicted $0.33 per share on the same basis. GAAP EPS of $0.18 for Q4 were 42% lower than the prior-year quarter's $0.31 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 83.6%, 230 basis points worse than the prior-year quarter. Operating margin was 14.5%, 980 basis points worse than the prior-year quarter. Net margin was 8.6%, 610 basis points worse than the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $121 million. On the bottom line, the average EPS estimate is $0.25.

Next year's average estimate for revenue is $519 million. The average EPS estimate is $1.24.

Investor Sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 39 members out of 49 rating the stock outperform, and 10 members rating it underperform. Among 16 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 11 give Progress Software a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Progress Software is outperform, with an average price target of $24.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. 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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  • Report this Comment On January 09, 2012, at 11:42 PM, Robeuro03 wrote:

    Progress will continue to struggle as IBM buys up the companies in this space. The product technology is very outdated and the market it serves continues to shrink. Mainly due to massive turn over at the executive level. Progress has gone through engineering leadership in the last three years at a record pace.

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