Here’s How TIBCO Software Beat Earnings Expectations

TIBCO Software Inc. (NASDAQ:TIBX) provides infrastructure software to companies for use either on-premise or as part of cloud computing environments.  The company’s software assits its clients in optimizing claims, processing trades, cross-selling products based on real-time customer behavior and averting crises before they occur.  TIBCO claims to provide its clients with a “two-second advantage,” i.e. the ability to capture the right information at the right time and act on it preemptively for a competitive advantage.

TIBX has over 4,000 customers worldwide and currently sports a $3.3 billion market cap.

Earnings: 4Q profit of $37.5 million ($0.22/share) vs. 4Q09 profit of $31.7 million ($0.18/share).  Excluding one-time charges, TIBX’s EPS was $0.31 vs. $0.23.

Revenue: Up 23% YoY to $241.2 million

Actual vs. Wall St. Expectations: TIBX beat EPS estimates of $0.28 and exceeded prior revenue guidance of $225-$230 million by a solid margin.

Notable Stats: TIBX unveiled a $300 million stock-repurchase program that will replace its existing repurchase program, which had $159 million remaining.

The new repurchase program represents approximately 9% of the company’s current market value.

TIBCO closed 164 deals of over $100k each and 25 deals worth over $1 million each during the Q.

TIBCO repurchased 15.1 million shares during the Q.

Did You Hear That? “TIBCO turned in an excellent year in 2010 — demonstrating our innovation leadership, broadening our business model, and delivering substantially higher growth and profit to our shareholders,” said Vivek Ranadive, TIBCO’s chairman and chief executive officer.  “As we turn to 2011, we are in an excellent position to benefit from three key trends in enterprise IT: mobility, cloud computing and real-time information. These trends are generating massive amounts of data and increasing IT complexity, which plays to our core strengths of simplifying systems deployment and integration and distilling insight from disparate pools of information.”

Competitors to Watch: Oracle (NASDAQ:ORCL), Progress Software (NASDAQ:PRGS), Adobe Systems (NASDAQ:ADBE).

Technicals: TIBX has done little but go up for the balance of 2010.  Up over 100% on the year and trading at 10-year highs, holders of TIBX are unquestionably going into the new year with smiles on their faces.  Still, those looking for an entry point may not be out of luck, as shares have retreated to their 50-day moving average for just the second time since August.  While selling volume was high following last week’s earnings report, all of TIBX’s moving averages remain upward sloping and the stock’s chart remains very bullish overall.

Commentary: TIBX is in a strong position to benefit from several key trends in the enterprise IT space in the coming year.  Three such trends pointed out by TIBX’s CEO were mobility, cloud computing and real-time info.

Analysts at S&P raised their rating on shares of TIBX to BUY, raising their price target by $6 to $26.  They noted that “TIBX continues to execute, but, in our view, also benefits from market dynamics as organizations begin to shift to event-driven systems from transaction-driven systems. We also see the rise of cloud deployments supporting demand.”

Disclosure: No holdings in TIBX.