Citrix Systems shares fall after weak Q1 revenue view
BANGALORE Jan 29 (Reuters) - Shares of Citrix Systems Inc (CTXS.O: Quotazione) fell as much as 14 percent Thursday, a day after the infrastructure software maker forecast a surprise fall in first-quarter revenue, prompting at least one brokerage downgrade and five price-target cuts.
The company, which develops virtualization software that allows a single computer to act like many "virtual" machines, had on Wednesday also posted a slight dip in quarterly profit.
Revenue from the company's application virtualization business, led by flagship product XenApp, fell 3 percent as customers delayed or reduced planned projects in the fourth quarter.
Deals with a value of more than a million dollars fell in the fourth quarter, as customers adjusting to lower budgets hesitated to make large capital commitments.
"We believe that the combination of slowing investments by enterprises in new applications and increasing levels of unemployment is negatively affecting sales of XenApp licenses," Credit Suisse analyst P. Winslow said in a note to clients.
Winslow estimated an 18.6 percent fall in XenApp license revenue for 2009, and said a near-term rise in the company's stock seemed unlikely.
He downgraded Citrix to "neutral" from "outperform" and cut the price target on the company's shares to $24.50 from $27.50.
"We believe Citrix is swimming upstream against a very challenging spending climate, which will continue to pressure growth rates in the coming quarters," FBR Capital Markets analyst Daniel Ives said. He cut his target price on the stock to $22 from $24.
In the latest fourth quarter, overall revenue growth at Citrix slowed to 4 percent at $415.7 million, while licensed revenue declined 9 percent to $162 million. Continua...