Shares of Progress Software Inc. (NASDAQ:PRGS) are plunging, down 16.7% as of 1:45 p.m. EDT, after the strategic business applications specialist announced mixed third-quarter 2018 results and reduced its full-year guidance.
Progress Software's adjusted (non-GAAP) revenue declined 1.8% year over year to $95.8 million, which translated into a 25% increase in adjusted earnings to $0.60 per share. By comparison, analysts' consensus estimates predicted lower earnings of $0.58 per share on higher revenue of $97 million.
Still, management remained optimistic, with CFO Paul Jalbert calling it a "solid revenue and EPS performance." He also noted strong cash flows enabled Progress Software to return more than $25 million to shareholders, including an 11% increase in its quarterly dividend to $0.155 per share.
"We are pleased with our Q3 and year-to-date performance, and with the growing interest and pipelines we are seeing for our new initiatives," stated CEO Yogesh Gupta. "We continue to make the investments we need to further strengthen our business and support our long-term success, while maintaining best-in-class operating margins."
For fiscal 2018, however, Progress Software now expects revenue of $393 million to $396 million (down from $399 million to $404 million previously), and adjusted diluted earnings per share of $2.45 to $2.48 (down from $2.45 to $2.50 before).
"While I'm disappointed in our moderated revenue outlook for the year, our business remains solid, led by the consistent performance of our OpenEdge ISVs," Gupta added. "I'm confident in our strategy, and in our ability to take advantage of the opportunities we see in modern application development."
Given its light top line and freshly reduced guidance, and with shares having rebounded nearly 23% from its 52-week lows in late June, it's no surprise to see Progress Software stock pulling back today.