Get Ready for Earnings Reports from Cloud Computing or Software Stocks VMW
Earnings reports from tech stocks have been a bright spot this revenues season as they have not been as bad as feared - meaning it might be worth taking a closer look at cloud computing or software stocks VMware, Jda Software Group and Saba Software that are scheduled to report revenues on Monday. In short, software and increasingly cloud computing are important segments of the tech sector however these are as well segments facing tough competition as so then as complex accounting issues. Hence, here is a quick earning report preview for VMware, Jda Software Group and Saba Software to help you prepare for Monday:
VMware provides virtualization and cloud infrastructure that scheduled to report earnings afterwards the market closes on Monday. On Friday, VMware fell 3.19% to $89.80 for a market cap of $38.37 billion however the stock is up 7.95% since the start of the year, down 15.8% over the past year and up 61.7% over the past five years. VMware expects to show revenue growth of around 22% when it reports revenues plus analysts expect EPS to come in at 66 cents - up 20% from the 55 cents reported for the same period last year. In addition, VMware has announced that its CEO will step down on September 1 in favor of the president and chief operating officer of EMC - its majority stakeholder. Still, investors will need to pay close attention to the deferred revenue that VMware reports as it has not but provided a figure and its that figure that will give a good indicator of future earnings. If not, its worth noting that the last time VMware reported earnings, earnings rose 25.1% year-over-year to $1.06 billion - past management's revenue guidance of $1.015 billion to $1.040 billion.
Jda Software Group offers "best-in-class" supply chain solutions and more than 6,000 companies have chosen JDA to transform their supply chains. Jda Software Group is scheduled to report earnings afterwards the market closes on Monday during on Friday, JDAS fell 0.44% to $29.71 for a market cap of $1.26 billion plus the stock is down 8.3% since the start of the week, down 4.6% over the past year and up 44.3% over the past five years. Wall Street has been expecting earnings of $171.27 million for revenue growth of about 5% along with EPS of $0.57 a share for EPS growth of negative 47%. And during that may look bad on the surface, its for all that better than the EPS of negative $0.03 a share that was reported last quarter. Nevertheless, its worth remembering that Jda Software Group competes with a couple of software industry heavyweights like Oracle Corporation and SAP AG - both of which have already reported and beat revenues estimates. If not, Jda Software Group as well received a notice of non-compliance with Nasdaq listing requirements for filing its 1Q2012 revenues report late previously this year.
Provider of learning
Saba Software is a provider of learning and talent management solutions known as the Saba People Cloud in other words scheduled to report revenues on Monday with no time supplied. On Friday, Saba Software fell 2.56% to $8.74 for a market cap of $260.33 million however the stock is up 10.8% since the start of the year, up 11.9% over the past year and up 69.4% over the past five years. Back in March, Saba Software tumbled afterwards announcing that it would delay the release of its fiscal 3Q2012 results because it would need more time to review the accounting treatment of certain international transactions. The Audit Committee has since reported that it had identified instances of improper time-recording in the Saba Software's professional services business - including prematurely recorded revenue of $271,000 on an international transaction for the quarter that ended November 30, 2010. For all that, its however not clear whether or not Saba Software will need to restate past revenues or whether it will be reporting something on Monday. Everything considered, the tricky accounting issues faced by Saba Software is an indicator of some of the accounting mine fields that software companies face when it comes to properly booking revenue.
The Bottom Line. At the very least, keep an eye on cloud computing and software stocks VMware, Jda Software Group and Saba Software and the revenues they will report on Monday.
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John Udovich is a paid contributor of the SmallCap Network. John Udovich's personal holdings should be disclosed above. You can as well view SmallCap Network's complete disclaimer and disclosure.
John Udovich is a paid contributor of the SmallCap Network. John Udovich's personal holdings should be disclosed. You can as well view SmallCap Network's complete disclaimer and disclosure.
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