announced preliminary fourth quarter results on Apr 3, 2013. For
the quarter ended Mar 31, Compuware expects to report non-GAAP
earnings per share ("EPS") in the range of 5 cents to 6 cents.
Currently, the Zacks Consensus Estimate is pegged at 16
Compuware expects total revenue to be in the range of $237.0
million to $241.0 million for the quarter. The Zacks Consensus
Estimate of revenues currently stands at $281.0 million.
Compuware noted that approximately 75% to 80% of committed deals
for the fourth quarter were pushed to fiscal 2014, primarily due
to uncertain IT budgets and slow recovery in the European IT
Application Performance Management revenues are expected to be
in the range of $76.0 million to $78.0 million, while Mainframe
revenues are projected in the range of $79.0 million to $81.0
Compuware forecasts license fees to be in the range of $46.0
million to $48.0 million. Maintenance revenues are expected to be
between $99.0 million and $101.0 million. Services revenues are
expected to be in the range of $45.0 million to $46.0 million.
Covisint revenues are expected to be in the range of $25.0
million to $26.0 million. Subscription revenues are expected to
be approximately $21 million for the fourth quarter.
Earlier, in Jan 2013, Compuware reported impressive third
quarter 2013 earnings of 12 cents per share that surpassed the
Zacks Consensus Estimate by 9% (11 cents). Quarterly results were
primarily aided by modest revenue growth and margin
Compuware also rejected a $3.2 billion bid from activist
investor Elliott Management Corp. Compuware cited the $11.00 per
share offer as inadequate and announced a number of initiatives
that included a dividend payment for the first time in its
Compuware will pay a dividend of 50 cents per share beginning
first quarter of fiscal 2014. The company announced a 3-year
restructuring plan that will save $60.0 million annually. For
fiscal 2014, the plan is expected to save a minimum of $20
million. Additionally, Compuware announced plans to distribute
its remaining shares in Covisint Corp directly to shareholders
after completing the IPO of the 20% Class A stock.
Over the last couple of months, several new private equity
funds, such as Apax Partners LLP and Hellman & Friedman LLC,
have emerged as prospective buyers for Compuware. Although a
better buyout offer will be positive for investors, we believe
that the prevailing sluggish macroeconomic conditions will likely
act as an impediment toward fetching a higher price.
We believe that Compuware's recently announced initiatives are
positive for shareholders over the long term. Moreover, new
program wins, innovative product pipeline and partnership with
International Business Machines (
will help Compuware to counter strong competition from the likes
BMC Software Inc. (
CA Technologies (
Currently, Compuware has a Zacks Rank #3 (Hold).
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