Blackbaud Earnings: Margins Suffer for Five Quarters Straight, Profit Drops

Rising costs hurt Blackbaud Inc. (NASDAQ:BLKB) in the third quarter as profit dropped from a year earlier. Blackbaud is a global provider of software and related services designed specifically for nonprofit organizations.

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Blackbaud Inc. Earnings Cheat Sheet

Results: Net income for Blackbaud Inc. fell to $2.8 million (6 cents per share) vs. $10.2 million (23 cents per share) a year earlier. This is a decline of 72.3% from the year-earlier quarter.

Revenue: Rose 28.4% to $122.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Blackbaud Inc. reported adjusted net income of 26 cents per share. By that measure, the company beat the mean estimate of 16 cents per share. It beat the average revenue estimate of $94.2 million.

Quoting Management: “Blackbaud delivered third quarter non-GAAP profitability that exceeded the high-end of our guidance, despite facing continued macroeconomic headwinds and transition-related factors in our enterprise business unit,” stated Marc Chardon, Chief Executive Officer of Blackbaud. “Our integration of Convio progressed well during the third quarter. We finalized the integrated product roadmap and communicated our “go forward” online fundraising and CRM offerings to our global sales organization and customer base. We are moving forward as a single organization with the best-of-both-worlds online and offline solutions for nonprofit organizations of all sizes and across verticals,” added Marc Chardon. Tony Boor, Chief Financial Officer of Blackbaud, said “We made excellent progress identifying and executing against synergies while bringing together Blackbaud and Convio during the third quarter. As a result we are tracking ahead of our original target of realizing $9-10 million in annualized cost savings by the end of 2012. As we navigate through the present economic uncertainty, we will continue to focus on protecting our bottom line and cash flow.”

Key Stats:

After two quarters of falling short, the company beat estimates last quarter. In the second quarter, it missed the mark by 8 cents, and in the first quarter, it came in under estimates by 3 cents.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 31 cents per share to 20 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At 66 cents per share, the average estimate for the fiscal year has fallen from 87 cents ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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