Informatica Corporation (INFA) Shares Tank 25% on Lower Forecast

Informatica Corporation (NASDAQ:INFA) shares plunged 25%, in the early trading hours today, following an earnings call, whose results missed analyst estimates. The company experienced a high decline in revenue from its European business segment, which it blames to be the major cause of the earnings miss.

Informatica Corporation (INFA) Shares Tank 25% on Lower Forecast

Sohaib Abbasi, the Chairman and Chief Executive Officer of the data integration-software maker was quoted in an article published on Businessweek, saying, “Most of our revenue shortfall in the third quarter was in Europe, where we fell well short of our own expectations”.

Europe has been the biggest quandary for several multinationals, due to the current financial crises in the region. The economies of several Euro zone members have dwindled in recent times, adding pressure on consumers’ pockets, amid the rising cost of living.

The shares of Informatica Corporation (NASDAQ:INFA) were trading at $24.84, at 11.25 A.M EDT, down more than 25%, and trading in volumes of hundreds of thousands. Informatica said that the third quarter earnings were estimated at about $0.25 to $0.27 per share, with revenue estimates of about $189 to $191 million, as compared to analyst estimates of about $0.34 EPS, and over $200 million in revenue. Informatica Corporation (NASDAQ:INFA)’s full report is expected to be out three weeks from now, tentatively, October 25.

Informatica faces competition from Industry giants, in the form of  International Business Machines Corp. (NYSE:IBM) computers, Microsoft Corporation (NASDAQ:MSFT), Oracle Corporation (NASDAQ:ORCL), and SAP AG (NYSE:SAP) among others. It has a profit margin of 14.33%, and an operating margin of 20.23% for the trailing twelve months. The quarterly revenue declined by 1.2% for the most recent quarter, YoY, while the earnings were down 23% for the same period YoY.

Informatica Corporation (NASDAQ:INFA) held cash reserves totaling $565.28 million at the close of the most recent quarter (Q2), equivalent to $5.21 cash per share. Its trailing twelve months price earnings ratio is pegged at 24.35 times, and has a target of 15.15 times for the next twelve months. The company has an enterprise value (EV) of $3.08 billion, as compared to a market cap of $2.71 billion.

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