Earnings Preview: Informatica

| About: Informatica Corporation (INFA)

Informatica (NASDAQ:INFA) is expected to report Q3 earnings Thursday Oct. 16 after market  close, with a conference call scheduled for 5:00 pm ET.


The consensus estimate is 17c for EPS and $111.97M for revenue, according to First Call.

Analyst Views

Thomas Weisel says while it believes that the company was tracking well against its targets through most of Q3, it does not believe that the company is immune to the macro effects seen by many tech companies already.

Weisel expects Informatica to be quite close to its Q3 estimates of $111M and 16c, but also believes that investors should expect guidance for Q4 to be set wisely and conservatively. First Call consensus for Q4 is 23c and $127.66M. Weisel's FY09 estimates of $513M and 83c are slightly below consensus of $515M and 86c. Given the reduced visibility into enterprise spending in recent weeks, and that Informatica typically guides for the out year at the end of Q3, Weisel would not even be surprised if INFA management simply decided to hold back on FY09 guidance for the time being. Oppenheimer recently lowered its estimates for Q4 and FY09 to reflect the worsening macro environment.

Despite the lowered outlook, Opco continues to think Informatica is well positioned to weather this downturn given its early move to adjust operations to a slowing environment, compelling product set, strong management and attractive valuation.

Wedbush expects in-line Q3 results as well, and believes that consolidation in the financial services space could create demand for Informatica's products as new projects stemming from consolidation would require new software licenses.

Key issues for the conference call: Forward guidance; guidance on deal flow and size; an update on the integration of the Identity Systems acquisition; thoughts on the macro environment and its effect on Informatica; an update on the company's share repurchase plan; and commentary on competition from existing focused vendors and the prospect of stronger future competition from the other leading database vendors.