Open Text Earnings: Here’s Why Investors are Not Happy Now

Open Text Corp. (NASDAQ:OTEX) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 5.0%.

Open Text Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 22.22% to $1.43 in the quarter versus EPS of $1.17 in the year-earlier quarter.

Revenue: Rose 13.64% to $347.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Open Text Corp. reported adjusted EPS income of $1.43 per share. By that measure, the company beat the mean analyst estimate of $1.42. It missed the average revenue estimate of $361.62 million.

Quoting Management: “We are pleased with our performance this year, delivering historical records in revenue, operating cash flow and non-GAAP earnings while making the strategic acquisition of Easylink and introducing a quarterly dividend program,” said OpenText CEO Mark J. Barrenechea . “With our sales organization expanded and fully trained, and our leadership position established as a premiere EIM provider, we demonstrated 6% organic license growth in the second half of FY2013 over the same period last year.”

Key Stats (on next page)…

Revenue decreased 0% from $0 in the previous quarter. EPS increased 13.49% from $1.26 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.33 to a profit $1.32. For the current year, the average estimate is a profit of $5.57, which is the same with that ninety days ago.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]