Citrix Q4: Strong earnings; 700 staff cut in restructuring

The virtualization giant's earnings beat expectations, but will let go about 8 percent of its employee base in order to claw back up to $100 million in pre-tax savings.
Written by Zack Whittaker, Contributor
Citrix reported Wednesday its fiscal fourth quarter results, beating Wall Street expectations.

The virtualization giant managed earnings of $1.10 cents per share on revenues of $851 million, up 6 percent on the year-ago quarter.

Wall Street was expecting $1.03 cents per share on revenue of $844 million.

For the fiscal year of 2014, Citrix reported annual revenues of $3.14 billion, in line with Wall Street estimates.

Breaking things down by division:

  • Product and license revenue down 1 percent
  • Software-as-a-service revenue up 10 percent
  • Revenue from license updates and maintenance up 9 percent
  • Professional services revenue (inc. consulting) up 15 percent

Despite the good results, the company said it will let go 700 employees (and 200 contractors), which aims to claw back up to $100 million in pre-tax savings. It will take up to $55 million in charges as part of the program.

Chief executive Mark Templeton said in prepared remarks said that he was "proud" of the company's full-year performance, but said he was "not satisfied."

In explaining the restructuring, he said: "We are looking ahead to 2015 with a focus on innovation that delivers a better experience, more flexibility and greater security to our customers, and a more focused organizational footprint that enables profitable growth."

For its fiscal first quarter outlook, the company said it expects revenue to fall between $780 million to $790 million, shy of Wall Street estimates of $796.7 million.

During the first quarter, Citrix will also take a charge of $30 million to $35 million related to employee severance arrangements, along with a separate charge of $3 million to $5 million relating to its restructuring plan.

Citrix ($CTXS) closed the day down 1.5 percent.

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