Shares of TIBCO Software (UNKNOWN: TIBX.DL ) took a deep, dark dive a couple of weeks ago, when the enterprise software expert released disappointing preliminary results. After beating analyst targets 17 quarters in a row, there was an actual miss on tap this time.
I didn't cover that bit of news, despite the market-moving punch it packed and my long history of TIBCO analysis. Why? Because our Foolish trading and disclosure policies wouldn't let me. I took that massive drop as a wide-open buy-in window, which means I couldn't talk about the stock for a few days afterward.
So, am I comfortable with my brand new TIBCO position? You betcha.
We know that the big data market is in its infancy, and that TIBCO plays a unique leadership role in it. The company has a strong history of rising sales and exploding earnings, but stock prices haven't always followed suit. I tend to miss every opportunity to invest in TIBCO thanks to that pesky disclosure policy. This time, I just couldn't help myself because the temporary discount was just too compelling. One look at this chart should speak volumes about why I'm so darn excited.
The final results are in, and they may be disappointing but not as bad as the pre-release would have you think. The company delivered non-GAAP earnings of $0.42 per share on $297 million in sales, which was below original guidance and estimates but above the updated numbers. TIBCO shares jumped as much as 8.2% on the news.
Analysts from Goldman Sachs scolded TIBCO for company-specific execution issues. TIBCO cited headwinds like soft government orders and Superstorm Sandy to explain some of the miss. Recent reports from sector neighbors Oracle (NYSE: ORCL ) and Red Hat (NYSE: RHT ) showed that it was possible to knock the cover off the ball anyhow.
No finger-pointing, please
But then, CEO Vivek Ranadive has no problem taking responsibility for TIBCO's missteps. The earnings report and early release both placed significant blame on -- yep -- TIBCO's own execution, particularly when it comes to sales efforts in North America.
The company has revamped the management ladder for this critical market and expects to do better next year. "We don't really see this as being a long process to correct it," said COO Murray Rhode. "It's a quarter or two to get people back on track."
Furthermore, the macroeconomic softness and weather-related slowdown may have undermined the odd deal here and there, but more likely just delayed most of them. In a phone interview with yours truly, Ranadive wouldn't let me put those words in his mouth, but I'm still convinced that we'll see some of the missed sales coming back in the first or second quarter instead. "We've taken our lumps and we're moving forward," he said.
TIBCO closed a massive $6 million deal with a Spanish bank during the quarter. Spain and the financial sector don't exactly make for low-hanging sales fruit right now, so a very large contract in the intersection of those trouble spots is pretty impressive. But it also shows that you can get deals done despite strong headwinds, which means that the company should be doing better in less troubled spots such as North America. "No excuses," is Ranadive's mantra for the quarter.
"We want to be careful about what we suggest," he said on the general analyst call. "These are execution issues and don't want to be too aggressive on how quickly those could be fixed, but we see great opportunity with our pipelines and looking forward."
The big takeaway
I'm excited about TIBCO's opportunity to ride the big data wave like Big Kahuna himself. The company's in-memory tools for data collection, management, and analysis has industry giants Oracle and IBM (NYSE: IBM ) playing catch-up, and nobody else can claim the "two-second advantage" that sets TIBCO's portfolio of tools apart from the pack.
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