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Cornerstone shares climb as 3rd-qtr sales increase
(Associated Press Via Acquire Media NewsEdge) Cornerstone OnDemand Inc.'s shares jumped Tuesday after the software company reported increasing revenue and lifted its sales guidance for the year.
THE SPARK: Cornerstone said late Monday that third-quarter revenue rose 54 percent to $30.8 million. Analysts expected $30.3 million, according to FactSet.
The company also now expects revenue for the year of $117 million to $118 million. It had previously predicted revenue of $115.5 million to $117.5 million in 2012. Analysts forecast $117.2 million.
The company's quarterly loss widened, however, as it spent more on marketing and other costs also shot up. It now expects a deeper loss for the year than analysts had predicted.
THE BIG PICTURE: Cornerstone, which develops human-resources software for corporations and nonprofit groups, went public last March.
It faces tough competition from companies such as German business software giant SAP AG but has booked some major clients, and says that the slowdown in crisis-struck Europe isn't affecting its growth.
THE ANALYSIS: Cornerstone is benefiting from a shift to "cloud computing," when companies rely on software not stored on their own computers, said Nomura analyst Rick Sherlund.
SHARE ACTION: Shares of the company soared 10 percent by early afternoon, increasing $2.64 to $28.97. Its stock price is nearing the top of its 52-week trading range of $14.50 to $32.50.
The company's initial public offering of stock priced shares at $13.
(c) 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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