BMC Software gains on earnings, analyst praise

Shares of BMC Software Inc. (Nasdaq: BMCS) rallied up 4 5/16, or 9 percent, to 52 11/16 Friday, one day after it beat Street estimates by 2 cents a share in its second quarter.

The software developer reported a profit or $105.3 million, or 42 cents a share, on sales of $400.7 million.

First Call consensus expected to return a profit of 40 cents a share in the quarter.

The $400.7 million in sales was a 43 percent improvement versus the $279.3 million in sales it recorded in the year-ago period. License revenues gained 47 percent year-over-year, with North American license business increasing 63 percent. Maintenance and service revenue went up 36 percent.

On Friday, both CS First Boston and Morgan Stanley Dean Witter raised their earnings estimates for the company.

CSFB bumped its 12-month price target from $49 a share to $64 a share and raised its fiscal 1999 earnings estimate from $1.95 a share to $1.99 a share. It also pushed up its fiscal 2000 estimate from $2.50 a share to $2.55 a share.

Morgan Stanley Dean Witter increased its 12-month price target from $72 a share to $20 a share and raised fiscal 2000 and fiscal 2001 earnings estimates by a few cents a share.

Twenty-five of the 27 analysts following the stock maintain either a "buy" or "strong buy" recommendation.

The stock peaked at 64 7/8 earlier this month after falling to a 52-week low of 30 in April.>