Earnings Preview: Blue Coat Systems

Blue Coat Systems (BCSI) is expected to report Q2 earnings after market close Tuesday, November 25, with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 17c for EPS and $115.84M for revenue, according to First Call. Guidance for Q2 provided by management on the last earnings call was for EPS of 15c - 20c and sales of $116M - $120M. Since then concerns about the macro outlook for IT has increased.

Analyst Views

Last week Needham said their checks indicated the company's October quarter is mixed, but likely better than feared. In October ThinkPanmure downgraded their rating to Accumulate from Buy. They cut their estimates to reflect "a more conservative outlook for the company's core WAN optimization business for FY '09 in light of increasing economic headwinds." Also in October Merriman reiterated their Neutral rating, but trimmed estimates as "macro IT concerns are likely to pressure domestic customers." Merriman expects in-line Q2 results but minimal sequential growth for the January and April quarters.

Key issues for the earnings call: forward guidance given the macro IT concerns; competition in the WAN optimization space; and more details of their recently completed settlement with the SEC over its stock-option and accounting practices.

Comments

[lucky lenny:]

does anyone know if Blue Coat earns any recurring revenues from their devices? thanks

2008 Nov 24 03:42 PM