Informatica Corp. (INFA) tumbled the most in three months after the maker of data-integration software reported preliminary third-quarter earnings and sales that missed analysts’ estimates, citing challenges in Europe operations.
Informatica fell 26 percent to $24.97 at 12:25 p.m. in New York, for the biggest intraday decline since July 6. Through yesterday, the Redwood City, California-based company had lost 8.9 percent this year.
The company, which gets about a quarter of its revenue from Europe, said that an unexpected sales decline on that continent during the period offset improvements in the U.S. and Asia Pacific region.
“Most of our revenue shortfall in the third quarter was in Europe, where we fell well short of our own expectations,” Chairman and Chief Executive Officer Sohaib Abbasi said in a statement today. The company is taking “aggressive steps to address” those “continued operational challenges,” he said.
Third-quarter profit was probably 25 cents to 27 cents a share, while revenue was likely $189 million to $191 million, Informatica said. Analysts projected profit of 34 cents a share on sales of $200.9 million, according to the average of estimates compiled by Bloomberg.
Informatica’s third-quarter shortcomings may be linked to sales-execution problems, especially in Europe, Derrick Wood, an analyst with Susquehanna Financial Group, said in an interview today. The company replaced its head of global sales in recent months, he said.
“It’s probably being felt more in Europe because of macro issues there and management disruption,” said Wood, who rates the shares hold. “But there has been management disruption across the board.”
FBN Securities analyst Shebly Seyrafi kept a buy rating on the stock, while lowering his price target to $32 from $45 today, citing the weakness in Europe.
“Informatica made several sales force changes recently, and it generally takes a few quarters for these changes to bear fruit,” Seyrafi wrote in a note to clients today.
Informatica named John McGee as executive vice president of worldwide field operations in July, succeeding Paul Hoffman, who the company said is retiring.
Debbie O’Brien, an Informatica spokeswoman, declined to comment on whether the executive change affected the company’s third quarter results.
Informatica is scheduled to report full results for the third quarter on Oct. 25.
Qlik Technologies Inc. (QLIK), which competes with Informatica, fell 8.3 percent to $19.11, after earlier trading as low as $18.25, for the biggest decline since July 6.
To contact the reporter on this story: Ryan Faughnder in New York at email@example.com
To contact the editor responsible for this story: Tom Giles at firstname.lastname@example.org