Bottomline Technologies jumps on strong outlook

Bottomline Technologies shares jump to 23-month high on strong profit guidance

• On 4:05 pm EDT, Friday October 23, 2009

NEW YORK (AP) -- Shares of Bottomline Technologies surged Friday to their highest point in nearly two years a day after the supplier of payment and invoicing technology raised its guidance for the year, saying it was gaining new business and increasingly profitable.

Bottomline, based in Portsmouth, N.H., said on Thursday in its fiscal first-quarter earnings release that it signed several new multiyear contracts with insurers and added "significant" new customers.

It also completed its acquisition of Bank of America's electronic settlement network, PayMode, one of the industry's biggest payment and invoice technology suppliers.

Bottomline raised its operating profit guidance to $1 per share for the year, from a previous outlook of 73 cents to 75 cents per share.

That implies 60 percent growth in core earnings, the company said on a conference call with analysts Thursday evening.

Bottomline on Thursday posted profit of $1.2 million, or 5 cents per share, in the three months ended Sept. 30, rebounding from a loss of $3.8 million, or 16 cents per share, in the same period last year.

Revenue rose 3 percent to $36.6 million from $35.5 million, and operating profit margin rose to 20 percent from 7 percent.

That level of profitability wasn't expected until the end of 2011, said Barrington Research analyst Derek Leckow in a note to investors Friday.

Bottomline has strong growth opportunities because of the transition from paper-based payments and invoicing to electronic-based processes, Leckow said, as well as the long-term potential of its PayMode acquisition. He raised his earnings estimates and reiterated his "Buy" rating on the company.

Bottomline shares rose $1.70, or 13.2 percent, to $14.61 in afternoon trading Friday. They hit a 23-month high of $15.23 earlier in the session.

Buzz up!