Stock splits can be tricky little things. In the case of enterprise software maker Progress Software (Nasdaq: PRGS), a recent 3-for-2 split might be the reason behind today's price drop.
To be clear, the split itself, which was implemented in January, did absolutely nothing to hurt or help the stock, at least not directly. But the company issued earnings guidance for the first quarter based on the old share count and just reported results based on 50% more shares, making you look twice to realize that this wasn't a serious miss.
Progress earned an adjusted $0.42 per share on $134 million of revenue, both perfectly in line with split-adjusted guidance and very close to analyst expectations. The original guidance called for earnings of $0.61 to $0.64 per share, or about $0.41 and $0.43 per share after the split. Full-year guidance stayed unchanged, and the outlook for the coming quarter was devoid of surprises, good or bad. But the stock fell more than 3% on the news, perhaps because of misjudged guidance numbers.
All things considered, this was an uneventful quarter for Progress Software. Direct rival Oracle (Nasdaq: ORCL) painted a somewhat brighter picture in last week's report, and TIBCO Software (Nasdaq: TIBX) will fill in some of the blanks when it reports earnings tonight. Reading these tea leaves will set the stage for the bellwether reports due from Microsoft (Nasdaq: MSFT) and IBM (NYSE: IBM) in a couple of weeks; so far, it looks like the enterprise software sector is chugging along just fine but also lacks spice at the moment.
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