S1 Corp. rises, swings to Q4 profit
Shares of S1 Corp. (Nasdaq: SONE) ended the session with a large gain on news after the close on Tuesday that the financial software maker swung to a fourth-quarter profit.
The Norcross, Ga.-based company announced that GAAP earnings from continuing operations for the three months ended Dec. 31, 2007, were $0.11 per share, compared with a loss of $0.17 per share a year earlier.
Revenues rose 6% to $53.4 million from $50.24 million during the final three months of 2006.
“The results were basically as expected,” said John Kraft, an analyst with brokerage house DA Davidson, in a phone interview. “What has been interesting is that expectations have been steadily declining.”
“I believe part of the pop today was recovery, catching up,” added Kraft, who is maintaining his “buy rating.”
For the full year, S1 reported GAAP earnings were $0.32 per share from continuing operations, compared to a loss of $0.17 per share for 2006. Total revenues increased 7% to $204.9 million from $192.3 million in 2006.
“We posted strong year-over-year growth in revenue and earnings and achieved several significant milestones during 2007,” CEO Johann Dreyer said in a statement. “We have turned S1 into a profitable organization that is well positioned for the future.”
Looking forward, Dreyer said he projects 2008 revenues between $216 million and $220 million and GAAP earnings of $0.37 per share and $0.40 per share.
“The guidance was basically inline,” Kraft said.
Additionally, Kraft was confident that there won’t be a slowdown in S1’s business despite the recent turmoil in the financial system.
“The banks are probably cutting their spending, but they are not going to do in so the technology that most of these vendors offers,” he said. “They can’t cut out data procession, internet banking, etc. These guys bring mission critical technology.”
At close, shares of S1 Corp. (SONE) had added $1.42, or 24%, to $7.46. The 52-week high of $9.79 was reached on Oct. 15, 2007, while the 52-week low of $4.95 was established on March 1, 2007.
