What: Shares of Verint Systems fell as much as 15.3% early Wednesday after the business intelligence software specialist released weaker-than-expected fiscal fourth-quarter results.
So what: Adjusted quarterly revenue fell 10.7% year over year, to $281.8 million, including an 11.5% decline in enterprise intelligence revenue, to $160.4 million and a 9.6% decrease in security intelligence revenue, to $121.4 million. That translated to a 14.2% decline in adjusted net income, to $56.7 million, and a 15.1% drop in adjusted earnings per diluted share, to $0.90. Analysts, on average, were anticipating adjusted net income of $1.17 per share on revenue of $318 million.
Now what: In the meantime, for the fiscal year ending Jan. 31, 2017, Verint expects enterprise intelligence revenue to grow in the mid- to high-single-digit percentage range, while security intelligence is expected to decline between 10% and 15%. As such, total revenue for the fiscal year should roughly flat on a year-over-year-basis, plus or minus 2%, resulting in a range of roughly $1.11 billion to to $1.15 billion, while adjusted earnings should be similar to last fiscal year at around $3.04 per share. Here again, Wall Street's consensus estimates called for higher fiscal 2017 revenue of $1.23 billion, and earnings of $3.54 per share.
To Verint's credit, the company did try to take away some of the sting by approving a new two-year, $150 million share repurchase authorization. And the earnings guidance above doesn't account for repurchases made under this plan. But in the end, this was a fairly cut-and-dry case of Verint underperforming relative to both its own expectations and those of Wall Street. For now, that's why I think investors would be wise to watch the stock from the sidelines until we get a better gauge for whether Vertint can indeed return to sustained growth over the long term.
The article Why Verint Systems, Inc. Stock Plunged Today originally appeared on Fool.com.
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