ArcSight fiscal 3rd-qtr profit falls 57 percent as higher expenses overshadow sales growth

ArcSight fiscal 3Q profit falls 57 percent

CUPERTINO, Calif. — ArcSight, a provider of network security software and services, said Thursday that its fiscal third-quarter profit fell 57 percent as higher operating expenses overshadowed growth in product and maintenance sales.

Shares of the company dropped $2.51, or 8.7 percent, in after-hours trading. The stock finished regular trading up $1.56, or 5.7 percent, at $28.89.

For the quarter that ended Jan. 31, the company earned $2.2 million, or 6 cents per share, compared with $5.1 million, or 15 cents per share, in the year-ago quarter.

When excluding one-time items, ArcSight earned 15 cents per share — a penny lower than what analysts polled by Thomson Reuters expected.

Revenue rose 27 year over year to $46.1 million, a bit higher than the $45.4 million analysts were looking for.

ArcSight said products revenue climbed 22 percent to $26.6 million, while maintenance revenue rose 47 percent to $14.7 million.

Operating expenses rose too, however, jumping 42 percent to $31.8 million. The increase came mostly from sales and marketing expenses, which rose 51 percent to $18.6 million.

ArcSight said its operating expenses were unusually light in the year-ago quarter since it scaled back costs due to the poor economy.

For the current quarter, ArcSight gave an outlook for adjusted earnings of 14 cents to 18 cents per share on $48 million to $52 million in revenue. Analysts are looking for 17 cents per share on $47.7 million in revenue.