Blackboard shares hit 14-month high on strong 3Q

Blackboard shares hit 14-month high after raising view; Analysts laud contracts, new services

• On 1:37 pm EST, Wednesday November 4, 2009

NEW YORK (AP) -- Shares of Blackboard Inc. jumped to a 14-month high Wednesday, a day after the educational software developer said its third-quarter profit rose nearly quintupled.

The company said a growing sales pipeline and new products helped propel cash flow, and it raised its guidance for the year. Its shares rose sharply in afternoon trading Wednesday.

On Tuesday, Washington-based Blackboard reported quarterly income of $4.3 million, or 13 cents per share, compared with earnings of $885,000, or 3 cents per share, in the same period last year. Excluding special items including stock-based compensation and non-cash interest expense, income was 40 cents per share in the latest quarter.

Sales rose 18 percent to $98.4 million.

Analysts polled by Thomson Reuters expected profit of 37 cents per share on revenue of $96.6 million.

Blackboard said it won new clients and expanded existing contracts, and it was seeing good adoption of newer products such as Blackboard Mobile, which delivers campus services and content to mobile devices.

The company now expects adjusted earnings per share for the year between $1.34 and $1.41, up from a previous forecast of $1.26 to $1.38. Analysts predict income of $1.33 per share.

Technological innovation and the Mobile service could help grow Blackboard's contracts, said Raymond James analyst Terry Tillman in a note to investors Thursday.

Renewal rates from elementary and high schools are staying "relatively stable" even though they are struggling with government budget constraints, according to Wedbush Morgan analyst Michael Nemeroff.

Blackboard shares rose rose $2.29, or 6.1 percent, to $40.17 in afternoon trading Wednesday. Earlier in the session, they peaked at $41.16, their highest level since September 2008.

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