IntraLinks Holdings Earnings: Margins Shrink on Rising Costs

IntraLinks Holdings Inc. (NYSE:IL) swung to a loss in the first quarter, missing analysts’ forecast. IntraLinks Holdings is a global provider of Software-as-a-Service solutions for securely managing content, exchanging critical business information and collaborating within and among organizations.

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IntraLinks Holdings Earnings Cheat Sheet for the First Quarter

Results: Reported a loss of $5.6 million (10 cents per diluted share) in the quarter. IntraLinks Holdings Inc. had a net income of $289,000 or one cent per share in the year-earlier quarter.

Revenue: Fell 3.1% to $50.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: IntraLinks Holdings Inc. fell short of the mean analyst estimate of one cent per share. It beat the average revenue estimate of $47.7 million.

Quoting Management: “Our revenue was above the guidance range we provided and profitability was consistent with our investment plan,” said Ron Hovsepian, IntraLinks’ president and CEO. “We have seen increased awareness and concern from senior executives around information security and compliance due to the recent proliferation of new consumer and prosumer-based content sharing offerings. IntraLinks is a clear leader in inter-enterprise collaboration providing corporations with an easy to use, secure, and compliant platform for sharing and managing content between businesses and is well positioned to capitalize on this emerging opportunity.”

Key Stats:

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the first quarter of the last fiscal year, which saw revenue rise 31.2%.

Gross margin went down 4.5 percentage points to 69.5%. The change appeared to be caused by costs, which went up 13.9% from the year-earlier quarter, while revenue fell 3.1%.

The company has now fallen short of estimates in the last two quarters. In the fourth quarter of the last fiscal year, it missed expectations by 2 cents with net income of 7 cents versus a mean estimate of net income of 9 cents per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the second quarter is one cent per share, down from 8 cents ninety days ago. At 8 cents per share, the average estimate for the fiscal year has fallen from 35 cents ninety days ago.

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

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