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Citrix's new boss same as the old one

It's shaping up to be a rough first day back for CEO Mark Templeton, who returns to the top spot at the software company after nearly a year.

Tech Industry
It's shaping up to be a rough first day back for Citrix CEO Mark Templeton, who returned to the top spot after nearly a year.

Templeton, who also served as president of the Fort Lauderdale, Fla., company, stepped down as CEO last June after Citrix missed estimates. At the time, Citrix said it was planning to hire a new CEO. But on Wednesday, Citrix said Templeton would resume the CEO position, replacing Chairman Roger Roberts.

Roberts is also vacating the role of interim chief operating officer. And Chief Financial Officer John Cunningham has been named senior vice president of finance and operations.

Shares lost 6 percent in late morning trading, falling $1.55 to $23.54. They're up from $22 in premarket trading.

Citrix makes software that allows applications designed for Windows operating systems to be installed over a network. It recently announced plans to acquire Sequoia Software for $184.6 million. Sequoia makes portal software that uses XML (Extensible Markup Language), a system of defining common information formats to share data. Citrix will be hosting a conference call to discuss that merger June 6.

Analysts were mixed about the executive shuffle. UBS Warburg analyst Don Young downgraded the stock from "strong buy" to "hold," saying the move showed "poor judgment" on behalf of the board and noting that Templeton was "demoted" by the board last year after "a period of disappointing performance and poor communications with investors."

"Reinstating the CEO after a failed outside search and expanding the CFO's responsibilities to COO--the board of directors has taken a relatively high-risk approach, which is not going to be well received by investors," he wrote. "It raises questions on why couldn't a strong outside CEO be recruited to the company? And why did the board demote the CEO and then turn around and promote him?"

But Lehman Brothers analyst Michael Stanek praised Templeton's return, writing in a research report that Templeton "has demonstrated (a) tremendous level of leadership in the last year, leading the company to strong financial and strategic results."

While A.G. Edwards analyst John Puricelli called the move "perplexing," he noted that "fundamentally this is a non-event."

"What concerns us most is employee morale and reseller morale. The few employees we've been able to talk to seem to be OK with the action. We have not talked to resellers yet," he wrote. "Since Templeton is a known quantity to all parties, our gut feel is that it'll be treated as 'business as usual.' No change in our fundamental opinion."

Citrix earned $28.9 million, or 15 cents per share, on sales of $132.8 million in the first quarter of this year. Analysts expect the company to post a pro forma profit of 18 cents per share on sales of $136.9 million, according to First Call.

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