Will TIBCO Earnings Keep Its Shares on the Rebound?

TIBCO Software will release its quarterly report on Thursday, and investors have started to feel more optimistic about how the company is taking advantage of opportunities within its industry. Yet with all the potential from the trend toward greater collection and analysis of data, TIBCO earnings really should grow more quickly than in the recent past.

TIBCO is definitely in the right place at the right time, with its focus on enterprise infrastructure software aimed at helping its customers make sense of the events they encounter and the information they collect to take appropriate action. TIBCO also aims at helping companies integrate different areas of their businesses -- including their presence within the cloud, in mobile, and on social media -- to come up with a coherent and unified strategy. Let's take an early look at what's been happening with TIBCO Software over the past quarter and what we're likely to see in its report.

Stats on TIBCO Software

Source: Yahoo! Finance.

Can TIBCO earnings finally explode higher?
Analysts have reined in their expectations about TIBCO earnings in recent months, reducing their August-quarter estimates by $0.03 per share and their full-year projections by $0.05 per share. The stock has turned things around somewhat, rising 15% since mid-June.

Despite the share-price gain, TIBCO hasn't consistently put up the results that investors want to see from its operations. In its May quarter, the company reported sales that were down almost 1%, and earnings tumbled much more dramatically. Falling licensing revenue caused GAAP net income to drop by two-thirds from year-ago levels, and even on an adjusted basis, the more-than-30% decline in earnings shows the difficulty that TIBCO has had maximizing its profitability.

But TIBCO still has plenty of potential to turn things around. The big data movement has picked up steam recently, as businesses collect increasing amounts of information and need guidance in analyzing it. With this rise in the amount of data, TIBCO has a big competitive advantage from the speed of its analytical tools. Even giants IBM and Oracle haven't been able to duplicate the performance of TIBCO's technology, despite their having identified the value of the overall big data trend and used their extensive customer networks to build a big presence in the segment.

Perhaps the biggest question for TIBCO is why a larger competitor hasn't sought to buy it out. With a modest market cap of around $4 billion, the company would make a logical target for a larger big-data player like Oracle or IBM looking to pick up its valuable technology. So far, takeover speculation hasn't led to anything concrete, but in the long run, a buyout could still materialize if TIBCO keeps improving on its execution.

In the TIBCO earnings report, watch closely to see if the company has resolved recent problems in executing on sales in the Americas. CEO Vivek Ranadive has said that those execution issues should now be history, but you'll want to see confirmation in the company's revenue figures in order to be certain.

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The article Will TIBCO Earnings Keep Its Shares on the Rebound? originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends TIBCO Software. The Motley Fool owns shares of IBM and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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