Jun 29, 2005 (01:06 PM EDT)
BMC Earnings Plunge; More Layoffs Loom
Read the Original Article at InformationWeek
BMC earnings plummeted for its fiscal fourth quarter, and executives for the Houston, Texas, software vendor plan to continue a head-count reduction to help tighten operating expenses.
BMC reported earnings of $15.5 million, or 7 cents a share, on revenue of $395.1 million for the fourth quarter of fiscal year 2005, which ended March 31. That is a 56 percent drop compared to BMC's fourth quarter last year, when the vendor earned $36.9 million, or 16 cents per share, on revenue of $400.2 million.
BMC President and CEO Bob Beauchamp said that while he was pleased with the execution of BMC's Business Service Management (BSM) strategy during the quarter, the company's financial performance "fell short of our expectations."
Beauchamp said more layoffs were on the way as BMC looks to further reduce its cost of doing business. He said operating expenses would continue to fall "as we complete the headcount reductions over the next two quarters."
In April, BMC announced a restructuring plan and laid off nearly 900 people. The vendor currently employees about 6,000.
BMC's total operating expenses rose a moderate 9 percent to $409.3 million compared to $373.8 million for the same quarter last year. But operating income dried up, ending in the red at negative $14.2 million, a 154 percent drop from a positive $26.4 million for the same quarter a year ago, according to BMC.
Licensing revenue also took a tumble, falling 16 percent to $152.7 million from $182.5 million for the same period last year. Licensing revenue for BMC's mainframe management products and distributed system management products came in the strongest, at $46.9 million and $60.6 million, respectively, although both figures represented year-over-year declines.
Patrol product licensing accounted for $28.1 million, a figure that also declined by 38 percent compared to the same quarter last year, according to BMC. Simplifying its Patrol product line is also part of BMC's cost reduction strategy.
Licensing revenue from BMC's identity management products, which the vendor is aggressively pushing, rose 19 percent year-over-year, although it only accounted for $3.1 million in revenue, according to BMC.
Beauchamp declined to give guidance for the first quarter of fiscal year 2006, saying that certain details were still being finalized.
BMC added a new channel chief in April as part of its restructuring.