Financial Tech Spending Slowdown Slams SS&C
NEW YORK (TheStreet) -- SS&C Technologies(SSNC) became the latest financial technology company to meet or beat analyst estimates but see its shares fall sharply as it revised guidance downward.
The Windsor, Conn.-based provider of software products and services to money management firms earned 33 cents per share on revenues of $120.9 million, it announced after the market closed on Thursday. While the profit was some 27% above the second quarter of 2011, analysts on the conference call Thursday expressed concern about the company's slightly reduced guidance for 2012.
SS&C now forecasts 2012 earnings of $112.7-115 million from a previous forecast of $113-118 million in June.
"The biggest thing that changed is that we won a number of mandates and the start dates got pushed out a couple of months," said Chairman and CEO Bill Stone on the call, adding "that really whacks revenue."
Jefferies & Co. analyst Ross MacMillan downgraded the shares to hold from buy on Friday, warning that "the economic backdrop could lead to slower acceleration of organic growth."
SS&C shares were down by 8.62% to $23.11 shortly after midday Friday.
SS&C became at least the third financial technology company in the past two months to meet or beat expectations but see shares drop precipitously on reduced guidance as financial services clients delay technology upgrades. FactSet Research Systems(FDS) and Advent Software(ADVS) also saw big selloffs in their shares following earnings reports in June and July, respectively. Broadridge Financial Solutions(BR) which reported earnings last week, avoided a similar fate by doing a better job of alerting investors to the slowdown.
-- Written by Dan Freed in New York.
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