Knobias Clip Report (02-27-2009) BCSI
Submitted By Knobias ClipReport
BCSI: Management Discusses Positive Q3 Results; Lazard Maintains Buy Rating
By Fain Hughes, fhughes@knobias.com
Shares of Blue Coat Systems, Inc. (BCSI) surged during Friday’s session after the Company reported its financial results after the bell on Thursday for third quarter ended January 31, 2009.
Total net revenue for the third quarter was $109.6 million, an increase of 35% compared to net revenue of $81.4 million in the same quarter last year, and a decrease of 8% compared to net revenue of $119.0 million in the immediately preceding quarter. Excluding net revenue associated with the acquisition of Packeteer, Inc. on June 6, 2008, net revenue for the third quarter of fiscal 2009 was $86.4 million, an increase of 6% compared to net revenue of $81.4 million in the same quarter last year, and a decrease of 8% compared to net revenue of $93.9 million in the immediately preceding quarter.
The Company reported non-GAAP net income of $9.3 million, or $0.21 per diluted share, in the third quarter, compared to non-GAAP net income of $15.3 million, or $0.38 per diluted share, in the third quarter of fiscal 2008, and net income of $11.6 million, or $0.27 per diluted share, in the second quarter of fiscal 2009.
Kevin Royal, CFO of Blue Coat Systems, commented in a conference call, “We are pleased with our Q3 performance in this challenging economic environment. Solid sales activity in Q3 drove our revenues to the midpoint of our guidance range, and ongoing focus on managing our cost structure allowed us to exceed our non-GAAP EPS guidance. We also continued to generate strong cash flow from operations.”
He added, “Our decrease in gross margins for the quarter was primarily related to higher manufacturing and fixed costs on a lower revenue base, and a shift in product mix to lower margin products.”
For the fourth fiscal quarter ending April 30, 2009, the Company is currently planning net revenue in the range of $112.5 to $117.5 million. On a non-GAAP basis, the Company expects net income of $0.18 to $0.24 per diluted share.
Brian NeSmith, President and CEO, commented, “While 2009 looks to be a challenging year, the markets for apllication performance monitoring, plan optimization and secure web gateway technologies continue to expand, even amid sluggish or negative growth across the broader network infrastructure market. We believe that the relative strength of the markets we compete in, combined with our strong value proposition targeting customers that wish to get more out of their networks, continue to drive our business.”
He added, “We are winning with our vision for the Application Delivery Network that’s designed to help the enterprise customer regain control of the network, reduce bandwidth and infrastructure costs, improve user productivity and protect users from malware and malicious threats. Our products provide the visibility, acceleration and security required to optimize and secure the flow of imformation to users across the extended enterprise.”
Mr. NeSmith noted, “We achieved another milestone in Q3 as we ascended to the number one position in the WAN Optimization solutions market, according to Gartner.”
Lazard Capital maintained a Buy rating today on BCSI. The firm believes the Company’s core business is performing well and remains a buyer of the stock following the Q3 results.
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