NEW YORK (AP) -- Shares of Guidance Software Inc. rose to their highest level in more than three years Wednesday on strong fourth-quarter results and an upbeat outlook.
THE SPARK: After the market closed on Tuesday, Guidance reported net income of $2.3 million, or 9 cents per share, in the last three months of 2011, compared with a loss of $446,000, or 2 cents per share, the year before. Adjusted for the cost of stock-based compensation and one-time items, the company had earnings of 16 cents per share. Analysts surveyed by FactSet had expected 10 cents.
Revenue grew 15 percent to $29.9 million, which beat estimates of $28.3 million.
The Pasadena, Calif., company expects earnings of 35 to 42 cents per share on revenue of $126 million to $131 million in 2012. Analysts were predicting earnings of 30 cents per share on revenue of $113.9 million.
Guidance Software also announced plans to buy CaseCentral Inc., a rival software company.
THE BIG PICTURE: Guidance, which is based in Pasadena, Calif., makes software to help with forensics and investigations, such as probes of intellectual-property thefts and electronic-record requests for lawsuits. It credits increased penetration of the EnCase platform in workplaces for strong results in the quarter.
The acquisition of CaseCentral, expected to close by March, would give Guidance more offerings in the growing area of cloud computing, the practice of storing data and running software on Internet-connected computers located outside a company's premises.
THE ANALYSIS: Raymond James analyst Brian Gesuale on Wednesday raised his target price for the company by $1 to $10. In a research note, he said the company was adding new customers faster and should grow even more with CaseCentral's products.
SHARE ACTION: The stock gained $2.23, or 29 percent, to $10.02 in afternoon trading Wednesday. Shares peaked at $10.15 earlier, the highest level since August 2008.
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