BroadSoft falls on weak 3Q, lackluster outlook

BroadSoft falls as 3Q results, 4Q outlook is below Wall Street expectations

Associated Press

BroadSoft's stock slid Tuesday as the telecommunications software company's third-quarter results and fourth-quarter outlook missed analysts' estimates.

THE SPARK: BroadSoft Inc. reported a third-quarter adjusted profit of 29 cents per share, a penny below Wall Street's estimate. Revenue rose 7 percent to $42.9 million. But that was below analysts' estimate of $45.2 million, according to FactSet.

For the fourth quarter, BroadSoft expects adjusted earnings of 34 cents to 49 cents per share on revenue of $47 million to $53 million. Wall Street had estimated profit of 51 cents per share on revenue of $54.8 million.

THE ANALYSIS: Jefferies' George Notter lowered BroadSoft's price target to $38 from $39.75. He kept a "Buy" rating on the shares, saying in a client note that while BroadSoft's business is more volatile than he previously thought, he's still optimistic about its long-term growth prospects.

But Pacific Crest Securities analyst Brent Bracelin cut BroadSoft's stock to "Sector Perform" from "Outperform," citing a sharp decline in billings.

SHARE ACTION: The Gaithersburg, Md., company's stock fell $7.54, or 23 percent, to $25.60 in afternoon trading. The stock has ranged from $20.45 to $39.35 in the past 12 months.

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