Citrix dives 40 percent

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Citrix Systems has worn a 40 percent drop in its third quarter earnings, blaming continuing weakness in sales of its packaged product business for the slump.

For the quarter ended September 30, Citrix reported earnings of US$16.8 million, or 10 cents per share, down 40 percent from earnings of US$27.8 million, or 14 cents per share, the same quarter a year ago.

Revenue for the quarter dipped to US$118.9 million, down 23 percent from US$153.5 million the same quarter last year.

Financial analysts expected the company to earn 6 cents on revenue of US$112 million, according to First Call estimates.

“As we've seen in Q1 and Q2, the economic environment has impacted our packaged product business, especially with smaller customers and first adopters of MetaFrame,” said Mark Templeton, president and CEO of Citrix.

To help boost sales, Citrix implemented a new go-to-market strategy during the quarter.

The company changed the selling incentives it provides to its Citrix Solutions Network solution provider partners to reward them for building deeper relationships with clients. Citrix also cut inactive partners from its program, dropping about 20 percent of its North American channel base. The company now has 2,400 North American solution provider partners, he said.

Earlier this month the company rolled out Citrix Easy Licensing, a program that makes electronic licensing available for the first time to smaller implementations.

"Previously only shrink wrap was available for projects of up to 500 concurrent users. With this introduction, those projects can be implemented with electronic licenses, which are easier to acquire, install and manage," Templeton said.

Citrix expects revenue in the fourth quarter to range from US$115 million to US$120 million on adjusted earnings per share of 11 cents to 13 cents.

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