2/5/2008 7:34:21 PM Tuesday after the bell, Blackboard Inc. (BBBB), a developer of online learning resources and Web-based academic forums announced that its fourth quarter profit surged from the year-ago period and handily topped Wall Street's profit target helped by a revenue growth of 23%. The company forecast its first quarter and full year 2008 earnings below analysts' estimates. Following the tepid outlook, the shares sank over 9% in after-hours.
The company's net income for the quarter climbed to $4.2 million or $0.14 per share from $201 thousand or $0.01 per share in the same period last year.
On a non GAAP basis, the education software provider's adjusted net income for the latest reporting period, excluding the amortization of acquisition-related intangible assets was $7.67 million or $0.25 per share, in comparison with $3.41 million or $0.12 per share in the same period a year before. On average, eight analysts polled by Thomson FirstCall expected the company to earn $0.24 per share for the quarter.
Total revenues for the quarter, comprising of Product revenues and Professional services revenues, rose to $63.2 million from $51.42 million in the year-ago period and surpassed analysts' consensus revenue estimate of $62.61 million. The company attributed the increase in revenue to the growth in its annual licensing of enterprise level products to global academic institutions as well as continued strong growth in its global ASP hosting business.
Product revenues, which form a major part of total revenues, were $57.36 million in the latest fourth quarter, compared to $46.79 million in the year earlier period. Professional services revenues for the quarter increased to $5.84 million from $4.62 million in the same period a year before.
For the year ended Dec.31, 2007, BlackBoard recorded a profit of $12.86 million or $0.43 per share, compared to a loss of $10.74 million or $0.39 per share in 2006.
On a non-GAAP basis, the company's adjusted net income rose to $26.25 million or $0.87 per share from $1.60 million or $0.06 per share in 2006.
The company's total revenues for the year surged to $239.45 million from $183.06 million in 2006. Wall Street analysts expected the company to earn $0.87 per share, on revenues of $238.79 million.
Seeking to move into the fast-growing alert and notification market, in January, Blackboard agreed to acquire privately-held NTI Group, Inc., for $182 million. NTI Group is a provider of mass messaging and notifications solutions for educational and government organizations via voice, email, SMS, and other text-receiving devices. The transaction is expected to close in the first quarter of 2008 upon regulatory approval.
According to Blackboard, for fiscal year 2008, the effect of acquisition on its non-GAAP adjusted earnings, excluding the impact of purchase accounting adjustments on deferred revenues and non-recurring merger-related costs is expected to be slightly accretive and is anticipated to be dilutive on a GAAP basis.
Looking ahead to the first quarter of 2008, the company expects non GAAP adjusted bottom line, excluding the amortization of acquired intangibles and the associated tax impact, to range between a net loss of $500 thousand or $0.02 per share to net income of $300 thousand or $0.01 per share. Wall Street analysts have consensus earnings estimate of $0.20 per share for the quarter.
On a GAAP basis, for the first quarter of 2008, the company sees a net loss in the range of $5.7 - $4.9 million, resulting in a GAAP net loss per share of $0.18 - $0.16.
Blackboard forecast its revenue for the quarter to range between $64 and $66 million. On average, 9 analysts polled by Thomson FirstCall have a revenue consensus estimate of $64.61 million.
For the full year 2008, excluding the amortization of acquired intangibles and the associated tax impact, the company expects non GAAP adjusted net income of $18.8 - $22 million, resulting in non-GAAP adjusted net income per share of $0.58 - $0.68. The company's full year 2008 earnings forecast is well below Wall Street's expectation of $0.96 per share.
On a GAAP basis, the company sees a net loss for the full year 2008 in the range of $4.0 million or $0.12 per share to $800 thousand or $0.02 per share.
Blackboard anticipates revenues for the year to range between $306 and $314 million, well above the analysts' revenue consensus estimate of $281.41 million.
Blackboard's financial guidance for the first quarter and full year 2008 reflects the inclusion of the NTI Group Inc. starting January 31, 2008, the effective date of the acquisition. The company said that its 2008 revenue related to NTI deferred revenue will be about $12 million lower than what NTI would have recognized as an independent company. NTI's revenue for 2007 is expected to be approximately $30 million, which would represent an annual growth rate of more than 50% over 2006.
When former NTI clients pay annually on their license agreements, Blackboard will recognize revenue for the fair value of these agreements over the term of the renewal, which is generally one year. Blackboard said it's 2008 results will also be negatively impacted by approximately $5 million in merger and integration related expenses from the NTI acquisition.
The stock is in Bearish phase and has gained 10.7% from its recent low of $30.90, which was reported on Jan.22. BBBB currently trades below its 50-day moving average of $38.16 and 20-day moving average of $35.
BBBB closed Tuesday's regular trade down 2.03% or $0.71 at $34.21 on a volume of 295,531 shares. In after-hours, the stock shed another 9.24% or $3.16 and was at $31.05.
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