Citrix shares down 6 pct despite 3Q beat

Citrix shares fall 6 percent; analyst says strategic outlook unchanged after 3rd-quarter beat

• On 1:11 pm EDT, Thursday October 22, 2009

FORT LAUDERDALE, Fla. (AP) -- Shares of Citrix Systems Inc., which helps streamline computer systems, fell 6 percent Thursday after an analyst said upbeat earnings did not change its strategic outlook.

Shares were down $2.56, or 6.2 percent, at $38.80 in midday trading Thursday.

The company's third-quarter results for adjusted earnings per share of 43 cents beat analyst expectations by two cents per share.

But The Benchmark Company analyst Brent Williams maintained his "Hold" rating on the shares because the company remained behind in the market for "virtualization software."

Virtualization software lets a single computer function like multiple machines, allowing companies to spend less on equipment and energy in their data centers.

"We don't think the strategic outlook for Citrix has changed materially in the last three months," Williams wrote in a research note Thursday.

"The company must continue to position itself as a viable alternative to server virtualization leader VMWare, where Citrix has struggled to light the growth burners after acquiring XenSource in 2007," he said.

Williams cited research firm Gartner estimates that desktop virtualization will be in 50 million personal computers by 2013, or 8 percent to 10 percent of units sold.

"It is still a relatively focused application," he said.

Williams left his fourth-quarter revenue estimate unchanged at $436 million, but raised his expectation for earnings per share by a penny to 53 cents.

He left 2010 estimates unchanged at $1.75 billion in revenue and $1.87 in earnings per share.

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