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BMC tops lowered 2Q expectations

    BMC Software (Nasdaq; BMCS) earned a little more than it expected in the second quarter.

    After market close Monday, the maker of mainframe and client-server software reported fiscal second quarter earnings of $110.4 million, or 44 cents per share, not including merger-related costs, one-time charges related to a legal settlement, and writedowns of goodwill and intangible assets. First Call's survey of 23 analysts had predicted a profit of 42 cents a share, which was the top range of BMC's own guidance from a few weeks ago.

    Second quarter revenue increased 41 percent year-over-year, to $415.7 million from $293.9 million in the year-ago period, when BMC earned $86 million, or 35 cents per share. Strength in distributed systems, especially BMC's flagship Patrol software, offset European weakness, said Max Watson, president, CEO and chairman of BMC.

    Mainframe business improved 23 percent, while distributed systems revenue rose 92 percent from a year earlier. Total license revenue increased 41 percent, led by North American revenue growth of 56 percent. Maintenance and service revenue increasd 42 percent year-over-year.

    BMC recorded a charge of $38.8 million related to lawsuits. Including that cost, along with goodwill writedowns and merger-related expenses, BMC earned $58 million, or 23 cents per share in the second quarter.

    Shares of BMC rose 1/2 to 53 7/8 in Monday's regular trading prior to the earnings report. Of 27 Wall Street firms surveyed by Zack's Investment Research, 16 maintain the equivalent of "moderate buy" ratings on BMC, nine recommend it as a "strong buy", and two have "hold" advisories on the stock.>