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Poor results for ACI and Jack Henry lead Finextra50 down 2.7%

12 May 2008  |  4220 views  |  0 Stock market quotes

It was a mixed bag for financial technology companies last week as earnings reporting season hit full swing. Missed expectations and downgraded forecasts dragged Cognizant, ACI Worldwide and Jack Henry lower, while positive results from GL Trade and Pegasystems saw them rise. The Finextra50 Financial Technology Index ended Friday down 2.7% to 85.31.

Major losers

ACI Worldwide was the index's biggest faller last week, dropping 21.12% to $17.78 after posting quarterly results that missed analyst expectations by a significant margin. For the quarter ended March 31 it posted a loss of $3.5 million, or 10 cents per share, compared with a loss of $414,000, or a penny per share in the same period one year ago.

Revenue rose three per cent to $92.6 million from $89.9 million last year. But costs were higher as the company says it invested in product development and in services personnel to manage the migration of customers to its latest BASE24 product.

Analysts polled by Thomson Financial predicted a profit of 10 cents per share on revenue of $93 million, as opposed to the 10 cents per share the company reported.

Jack Henry also suffered last week after missing third-quarter profit expectations. Its shares fell 13.05% last week to close Friday at $22.99 after posting results that were "slightly" below expectations, with shortfalls in license and hardware revenue. Its profit for the quarter ended March 31 was $26.6 million, or 30 cents per share, which is up just one percent from $26.4 million, or 29 cents per share a year ago. Revenue rose 11 percent to $187.9 million from $168.9 million in the year-ago quarter.

i-flex and Cognizant also dropped last week on earnings announcements. i-Flex closed Friday down 12.63% to Rs1245, despite reporting 40% quarter-on-quarter growth in net income. Cognizant fell 10.07% to $29.73, led by a reduction in its second-quarter forecast. This is despite reporting a first-quarter profit rose of 35%, which exceeded analyst expectations.

Major gainers

GL Trade was the index's biggest gainer last week, after a positive earnings announcement and reports that its major shareholders, including NYSE Euronext, are considering various options for the company, including "withdrawing their participation". It ended Friday up 19.8% to EUR33.95 after reporting quarterly revenue was up 10% on the same quarter a year ago on a like-for-like basis.

Pegasystems had a record quarter that drove its shares up 18.47% to $12.57. For the quarter ended March 31 its total revenue fwas $48.5 million, up 29%, on $37.5 million revenue for Q1 2007. Net income was $2.9 million, compared to $1.0 million for the year-ago quarter. The vendor claims a strong demand for its SmartBPM suite in the financial services sector has contributed to its performance.

The firm has "closed several license sales with leading banks that are applying our SmartBPM Suite to create 'servicing backbones' for improved operational efficiency," according to Alan Trefler, Pegasystems' chairman and CEO.

Vasco Data Security also rose last week by 11.29% to $11.24 after the stock was upgraded at Jefferies to buy rating from hold with a price target of $13.

Other firms to see significant increase were:

 

Index comparison

Methodology
More information on the Finextra50 Financial Technology Index methodology and constituent stocks can be found here.

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