Citrix shares rise as 4Q results signal growth
LOS ANGELES (AP) — Shares in cloud-computing company Citrix Systems Inc. rose 10 percent Thursday after better-than- expected fourth-quarter results and a bright outlook suggested that the company is broadening its business and still has strong growth potential.
THE SPARK: The Santa Clara, Calif.-based company said Wednesday that it earned an adjusted 90 cents per share in the quarter through Dec. 31, beating the 84 cents per share expected by analysts polled by FactSet.
Revenue rose 19 percent to $740 million, beating the $706 million expected by analysts.
The company said it expects to earn between $3.12 and $3.15 per share for 2013 on revenue between $2.95 billion and $2.98 billion. Analysts had forecast $3.13 per share on revenue of $2.91 billion.
THE BIG PICTURE: Citrix's technology enables people to work and collaborate away from the office. Its products are in use at more than 260,000 organizations, with more than 100 million users. It makes money primarily through licensing its technology and offering maintenance and software services.
Its revenue has grown by a double-digit percentage for 12 straight quarters.
THE ANALYSIS: The company's market share is growing in its cloud data center and networking business, while growth in its desktop business wasn't as slow as many analysts had predicted.
"We see (Citrix) transforming into a broader cloud and mobile infrastructure vendor beyond the desktop market," said Susquehanna Financial Group analyst J. Derrick Wood in a Thursday research note. He raised his price target by $10 to $95.
The strong quarter alleviated concerns about licensing revenue, said Pacific Crest analyst Rob Owens. He noted the company had more "million-dollar deals" in the quarter — 55 versus 48 a year ago — which he said should "assuage investors' concerns that there is still strong underlying momentum in the company's business."
Owens has an "Outperform" rating on the shares and a $90 price target.
SHARE ACTION: Citrix shares rose $6.79 to $73.77 on Thursday. Shares have traded in a 52-week range between $56.57 and $87.99.