Citrix Sees Up to $100 Million Annual Savings in Restructuring

   By Maria Armental 
 

Citrix Systems Inc. (CTXS) is restructuring operations, a move the company expects will save it $90 million to $100 million a year before taxes.

Layoffs will be part of the restructuring, which will affect about 700 full-time workers and 200 contractor positions, the company said. It will cost the company $40 million to $45 million in severance and $9 million to $10 million to consolidate leased facilities in the current year, it added.

Shares rose 3.40% to $61.20 in recent after-hours trading on the news.

The Fort Lauderdale, Fla., company specializes in virtualization, networking and cloud infrastructure and has benefited from increased demand for desktop visualization, a crucial step in cloud computing.

Citrix said it expects to make 70 cents to 72 cents a share on revenue of $780 million to $790 million in the current quarter, and to earn $3.60 to $3.65 a share on revenue of $3.29 billion to $3.33 billion for the year. Those numbers are below the consensus of 80 cents a share on revenue of $796.7 million for the quarter, and $3.69 a share on $3.36 billion for the year, according to analysts surveyed by Thomson Reuters.

For the latest quarter, Citrix reported a profit of $95.2 million, or 58 cents a share, down from $138.6 million, or 74 cents a share, a year ago. Excluding stock-based compensation expenses and other items, profit rose to $1.10 from $1.04 a year earlier.

Revenue rose 6% to $851.5 million.

Analysts had expected $1.02 a share on $844.1 million in revenue.

Professional-services revenue--which includes consulting, product training and certification--rose 15%, while software-as-a-service revenue rose 10%, and revenue from license updates and maintenance, which includes annuity revenue from subscriptions paid when new licenses are purchased, rose 9%. Revenue from product and licenses, or new product purchases, meanwhile, fell 1%.

By region, Citrix saw the largest gain in Europe, Middle East and Africa with a 7% increase.

Deferred revenue rose 10% from the year-ago period to $1.56 billion as of the end of the quarter.

Gross margin fell to 79.5% from 83%, while operating expenses rose 10.8%.

Through Wednesday's closing, the company's stock was up 0.78% over the past 12 months.

Write to Maria Armental at [e-mail]

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