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BMC Software 2Q net income falls as expenses rise

October 26, 2011

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HOUSTON—Business software company BMC Software Inc. said Wednesday that its second-quarter net income fell 13 percent as expenses rose.

The results beat analyst views, but BMC reduced its outlook for the full fiscal year, predicting a range of adjusted earnings that may miss analyst views. The company's stock fell 8 percent in after-hours trading.

For the quarter that ended Sept. 30, BMC's net income totaled $115 million, or 65 cents per share, compared with $132 million, or 73 cents per share, in the same quarter a year earlier.

Excluding one-time items such as a tax benefit of 10 cents per share, the company earned 87 cents per share -- 6 cents more than what analysts polled by FactSet expected, on average.

Revenue rose 11 percent to $557 million, with license revenue up 10 percent to $230 million and maintenance revenue up 7 percent to nearly $271 million.

Analysts hoped for $541 million in revenue.

The company said operating expenses rose 10 percent to 396 million from 359 million in the year-earlier quarter.

For the full fiscal 2012 year, BMC said it's now looking for adjusted net income of $3.21 to $3.31 per share, which is lower than the $3.25 to $3.35 per share it forecast in July. It also expects revenue to grow "in the mid-single digits" over the $2.1 billion it reported in fiscal 2011 revenue; it previously predicted growth in the "high single to low double digits."

Analysts would like to see adjusted net income of $3.29 per share on $2.24 billion in revenue for the full fiscal year.

BMC shares dropped $3.13, or 8.1 percent, to $35.60 in after-hours trading. During regular trading, the stock fell 82 cents, or 2.1 percent, to close at $38.62.