KFDA - NewsChannel 10 / Amarillo, TX: newschannel10.comSmith Micro Software posts profit but cuts outlook

Smith Micro Software posts profit but cuts outlook

ALISO VIEJO, Calif. (AP) - Smith Micro Software Inc. said Wednesday it turned a profit in the third quarter but cut its 2009 revenue estimate, sending shares tumbling nearly 20 percent in aftermarket trading.

The company, which makes software for the wireless market, posted a profit of $2 million, or 6 cents per share, compared with a year-ago loss of $1.6 million, or 5 cents per share. Smith Micro Software reported lower stock-based compensation costs in its latest quarter, and paid $2 million less in taxes.

Excluding one-time costs like stock based compensation and amortization, it said it earned 20 cents per share in the latest period, topping the 19 cents expected by analysts surveyed by Thomson Reuters.

Revenue increased 4 percent to $27.8 million from $26.6 million, but did not reach analyst estimates of $29.4 million.

The company said its third-quarter revenue did not live up to its own expectations because of economic pressure. Saying it is unsure how much revenue it will get in the fourth quarter, Smith Micro Software lowered its full-year revenue forecast to a range of $105 million to $110 million from a prior outlook of $110 million to $115 million.

Analysts expect $111.3 million in revenue, on average. In aftermarket trading, the stock dropped $1.80, or 19.9 percent, to $7.27 from a closing price of $9.07.

Smith Micro Software also said it completed its purchase of Core Mobility Inc. on Oct. 26. In September, it agreed to buy the company for $10 million in cash and 700,000 shares of stock. Core Mobility makes synchronization and backup technology for wireless carriers and cell phone makers.

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