Citrix Systems shares tumble on outlook fears

Shares of Citrix Systems Inc., which makes software and machinery that helps companies remotely manage their applications, have fallen more than 6 percent over the past two days on lingering fears about the company's vulnerability to economic turbulence.

The stock has been under pressure since the Fort Lauderdale, Fla.-based company clipped its 2008 forecast Wednesday after reporting second-quarter results.

In the April-June period, Citrix's profit dropped 35 percent over last year while sales grew 17 percent.

Those results were better than Wall Street was expecting, but investors are worried because the company cut its full-year profit guidance to between $1.54 per share and $1.60 per share. The previous guidance was a range of $1.54 per share to $1.64 per share.

Citrix also forecast sales of between $1.59 billion and $1.62 billion. The company had previously predicted between $1.6 billion and $1.65 billion in sales.

Like many companies, Citrix is facing worsening economic conditions in the U.S. that are causing many businesses to cut their spending or delay big information technology buys.

Citrix also competes in the market for so-called "virtualization" software against industry leader VMware Inc., which also lowered its 2008 outlook earlier this week. Virtualization software allows a single sever to act as multiple machines, a technological trick that boosts their performance and saves on energy costs because companies need fewer machines to do the same job. Intensifying competition in that industry is pressuring prices.

The shares have fallen $1.78, or 6.5 percent, to $25.69 in the two full days of trading since Citrix reported its results Wednesday. The stock was down 55 cents Friday to close at $25.69. In the year to date, the stock has shed 31 percent.

Citigroup analyst Brent Thill said in a note to clients that Citrix's stock is becoming more attractive as its price falls, but added that it's "too early to call a full recovery for the shares considering management's cautious comments about the overall environment." Citigroup maintained its "Hold" rating on Citrix's stock.