Pegasystems Shares Plunge as Q3 Results Fall Short of Expectations (PEGA)

Shares of Pegasystems Inc. (NASDAQ: PEGA) are sinking in trading today after the Cambridge, Massachusetts-based company reported third-quarter results that fell short of Street estimates. The company’s outlook also disappointed investors.

Pegasystems shares fell to an intra-day low of $28.34. The stock is currently trading 21.54% lower at $29.06 on above average volume of 1.76 million. Pegasystems shares have fallen almost 21% so far this year.

Pegasystems, which develops, markets, licenses and supports software to automate complex, changing business processes, reported net income of $5 million, or $0.13 per share for the third quarter of 2011, compared with net income of $3.1 million, or $0.08 per share reported for the same period in the previous year. The company’s adjusted net income for the quarter was $0.15 per share, well below Street estimates of $0.31 per share.

Pegasystems reported a 6% increase in third-quarter revenue to $95.5 million. Analysts were expecting the company to report revenue of $111.1 million.

The company’s licensing signings fell during the third quarter compared with the previous year. However, its new business was up sharply even in a weak economic environment. The company noted that more and more customers are now choosing term licenses rather than perpetual ones.

Pegasystems also provided its outlook for the full year. The company said that net income for the full year is expected to be around $0.15 per share. Excluding one-time items, the company expects net income of $0.61 per share for the full year. This is well below analysts’ estimate of $1.17 per share.

Pegasystems expects full-year revenue to come in at around $410 million, which is again below the Street estimates of $442.7 million. For 2012, the company expects revenue to come in at $500 million, compared with consensus forecast of $521.1 million.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.