Citrix Raises Annual Outlook as Quarterly Earnings Jump

Citrix Systems Inc. reported better-than-expected results in the latest quarter and raised its outlook for the year as the software company benefited from climbing revenue from its license updates and maintenance business, its largest division.

Shares of the company climbed 2.6% after hours, to $88.50.

Citrix's license updates and maintenance business—responsible for about 47% of revenue for the September quarter—rose 5% compared with the same period last year. During the third quarter of 2015, the company was hit by a roughly $65 million impairment charge, which made for a favorable comparison for the latest quarter.

The company raised its annual outlook to adjusted earnings between $5.18 and $5.20 on revenue in the range of $3.40 billion to $3.41 billion.

Previously the company had expected adjusted earnings on a per share basis between $5.00 and $5.10 with revenue in the range of $3.37 billion to $3.39 billion.

The company also released a preliminary outlook for the 2017 fiscal year that called for revenue to rise between 3% and 4%.

Citrix makes workplace software that allows employees to work from their own desktops or mobile devices off a centralized data center, which is known as virtualization.

Overall, in the latest period, Citrix reported a profit of $131.9 million, or 84 cents a share, up from $55.9 million, or 35 cents a share, a year ago. Excluding certain items, profit rose to $1.32 a share from $1.04 a year earlier, handily topping analysts' estimates of $1.19.

Revenue rose 3.4%, to $841.3 million, above analysts' views of $827.2 million.

The company had forecast earnings on a per share basis between $1.18 and $1.20 on revenue in the range of $820 million and $830 million.

Revenue in half of the company's four divisions climbed. Professional-services revenue—which includes consulting, product training and certification—fell 19%, to $29.9 million. Revenue from product and licenses, or new product purchases, remained virtually flat at $206.2 million. Meanwhile, software-as-a-service revenue rose 8.5%, to $207.1 million, and revenue from license updates and maintenance, which includes annuity revenue from subscriptions paid when new licenses are purchased, rose 4.9%, to $398.2 million.

Earlier this year Citrix agreed to merge its virtual-meeting division with LogMeIn Inc. Citrix had already said it would spin off the business, known as GoTo, in a tax-free deal in the second half of the year. GoTo's software allows users to connect to business meetings from various devices, among other functions.

Last fall, Citrix also announced plans to cut about 1,000 jobs. The moves came after activist investor Elliott Management Corp. called for changes at the software firm.

Elliott had urged Citrix to slim down by selling assets and cutting costs.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

October 19, 2016 18:25 ET (22:25 GMT)

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