Compuware Profits Fall But Beat Wall Street Estimate; Revenue Down Too
DETROIT — Compuware Corp.’s profits beat Wall Street estimates but its revenues fell short, according to figures for the first fiscal quarter ended June 30 reported Tuesday by the Detroit-based software and IT services company.
Net income for Compuware (Nasdaq: CPWR) was $10.5 million or 5 cents a share, down from $16.9 million or 8 cents a share in the first quarter of the prior fiscal year. Wall Street’s latest expectations were for 6 cents a share, according to WallStCheatSheet.com.
Revenue was $226.2 million, down from $230 million a year earlier. The revenue figure was below Wall Street expectations of $236 million.
Among components of revenue, new software license fees — a key indicator of future growth in maintenance and subscription fees — were $34 million, down slightly from $34.1 million a year earlier. Maintenance fees were $102.9 million, down from $107 million a year earlier. Subscription fees were $20.5 million, up from $19.1 million a year earlier. Professional services fees were $48.2 million, down from $53.6 million a year earlier. And application services fees were $20.6 million, up from $16.2 million a year earlier.
“Driven by technology mega-trends like mobile, cloud and big data analytics, Compuware’s growth engines continue to rapidly increase revenues,” Compuware CEO Bob Paul said in a statement. “Our Compuware APM and Covisint solutions in particular stand squarely in leadership positions for this technology revolution and have led the way to a solid Q1.”
The company said its application performance management software and Covisint secure data transfer service produced strong revenue increases, while Compuware mainframe product revenues declined as expected. The company said upcoming integration of Compuware APM — dynaTrace and Strobe — will offer some potential upside to the mainframe business through the industry’s only end-to-end transaction management system.
Company expenses were relatively flat for the year, with total operating expenses at $209.6 million for the quarter, down from $210.4 million a year earlier. The cost of software license fees was $4.8 million, up from $3.5 million last year. The cost of maintenance fees was $8.9 million, down from $9.5 million last year. The cost of subscription fees was $7.4 million, up from $7.1 million a year earlier. The cost of professional services was $42.3 million, down from $45.1 million last year. And the cost of application services was $17.7 million, up from $16.8 million last year.
Sales and marketing expenses were $62.2 million, up from $62 million last year. Administrative and general expenses were $39.7 million, down from $41.5 million a year earlier.
The company reported a negative cash flow of $15.7 million for the quarter, due to a $49.5 million paydown on its debt, vs. positive cash flow of $14.6 million a year earlier.
Later Tuesday evening, a replay of a conference call discussing the results will be available by calling (800) 475-6701 in the United States or (320) 365-3844 elsewhere. The replay passcode will be 251814. Additionally, investors can listen to the conference call via webcast by visiting the Compuware Corporation Investor Relations Web site at www.compuware.com. The replay will be available through July 31.
Wall Street was nonplussed with the results. Compuware stock was unchanged in after-hours trading at $8.63. During the regular trading day Tuesday, it fell 6 cents or 0.7 percent, on a day the tech-heavy Nasdaq index fell 0.9 percent.