Why Guidewire Shares Climbed Higher

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: Shares of insurance software specialist Guidewire (NYSE: GWRE  ) are climbing higher today, up by as much as 12% after the company announced earnings and guided next quarter's sales above Street forecasts.

So what: Revenue in the fourth quarter was $67.6 million, up 33% from a year ago. Adjusted net income came out to $6.4 million, or $0.10 per share. CEO Marcus Ryu said the company is well positioned as the insurance industry inevitably abandons legacy systems with next-generation software.

Now what: Guidewire provided guidance on the conference call with analysts, expecting fiscal 2013 to see revenue between $276 million and $288 million, a head above the market's expectations of $270.2 million. The next quarter should also be solid, with an expected revenue range of $59 million to $62 million. On the flip side, the profit estimates fell short, with full-year adjusted earnings pegged between $0.23 and $0.30 per share, shy of the $0.34 consensus. Investors are clearly focusing on the bright side today.

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

Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy.
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