Beleaguered software maker Progress Software (NASDAQ:PRGS) steps up to the plate once more on Tuesday, to deliver its earnings report for fiscal Q4 and full-year 2006. Thanks to some "issues" with backdated stock options, it reported only revenues last quarter. But Progress has promised to file all necessary 10-Q and 10-K filings through the end of 2005 with the SEC by today, which suggests it may have enough confidence in its numbers to be able to give us more detail on 2006 as well, when it reports next week.

What analysts say:

  • General consensus. Four analysts still follow Progress, where buy ratings outnumber sells 3 to 1.
  • Revenues. Analysts expect to see Progress's fiscal Q4 2006 sales rise 9% year over year, to $117.6 million.
  • Earnings. They also project 8% growth in profits to $0.41 per share (pro forma.)

What management says:
Like seemingly half of the companies on the stock market, Progress has gotten itself embroiled in the ongoing stock-options backdating imbroglio. Thanks to first a self-initiated review of past options grants, and then an SEC investigation into the same, the company didn't file a 10-Q with the SEC last quarter, and it won't until it's got the damage assessment finalized. At last report (in August), management estimated that backdated stock options are going to cost about $20 million to $30 million in charges for "stock-based compensation" over a period stretching from December 1995 through February 2006.

This mess affected the earnings report last quarter as well. As fellow Fool Tom Taulli pointed out, it prevented the company from even knowing precisely how much it earned last quarter; Progress limited itself to describing its revenues (up 12%) and issuing an earnings (actually, revenues) warning on next (i.e. this) quarter's results.

What management does:
Progress' failure to keep up to date on its SEC filings has frozen its margins in time. Here's how they looked at last report:

Margins %

11/04

2/05

5/05

8/05

11/05

2/06

Gross

83.1

83.5

84.0

84.3

84.3

84.5

Op.

13.5

14.5

16.0

16.8

17.3

15.8

Net

8.9

9.8

10.7

11.6

12.1

11.0

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
In this section, we usually give you a rundown of how well a company has been doing operationally in recent quarters, as well as highlight any red flags that have popped up and deserve special attention in the soon-to-arrive earnings report.

Hmm. Here's a flag for ya: The company hasn't filed a 10-Q form since April! I don't know about you, but for my part, that's what I'll be reserving my attention for next week.

Competitors:

  • Ciprico (NASDAQ:CPCI)
  • IBM (NYSE:IBM)
  • Magic Software (NASDAQ:MGIC)
  • Microsoft (NASDAQ:MSFT)
  • Oracle (NASDAQ:ORCL)
  • Tibco Software (NASDAQ:TIBX)

Microsoft is aMotley Fool Inside Valuerecommendation. Check out the newsletter service for value hounds with a free, 30-day trial.

Fool contributorRich Smithhas no interest, short or long, in any company named above.