MicroStrategy Incorporated Stock Plunges 10% on Q4 Revenue Miss

By Tim BeyersFool.com

MicroStrategy pitching its software wherever there's a crowd. In this case, via a billboard at Times Square. Credit: MicroStrategy via Facebook

Shares of MicroStrategy stock fell just over 10% in late trading after reporting fourth-quarter revenue that came well short of expectations. Here's a closer look at the final totals versus Wall Street projections:

Continue Reading Below

MicroStrategy Revenue YoY Growth EPS YoY Growth
Consensus estimate $167.73 million 1.1% $1.04 (27.3%)
Q4 actuals $148.87 million (10.3%) $1.99 39.2%
DIFFERENCE ($18.86) million (11.2%) +$0.95 +66.5%

Sources: Yahoo! Finance and MicroStrategy press release

MicroStrategy didn't offer a comment on the results in its earnings press release. Instead, the company turned to customer testimonials and research that positions its product as best in providing business intelligence via mobile devices.

"In December 2014, MicroStrategy announced that independent analyst firm Dresner Advisory Services rated MicroStrategy the number one overall offering out of 25 vendors for 2014 Mobile Computing / Mobile Business Intelligence (BI). This is the fourth year in a row that MicroStrategy has topped the list of vendors," the company said.

What went right: Profits soared thanks to careful expense management. All told, MicroStrategy cut its cost of revenue by 4% and operating expenses by 26.5%. Earnings improved 39% as a result.

What went wrong: Overall revenue fell 10.3%, while product and subscription revenue declined 31%. Worse, product support accounted for just over half of sales, up from 44% in fourth quarter 2013. MicroStrategy appears to be having a tougher time selling its newest technology.

What's next: MicroStrategy didn't include guidance in its press release. What do analysts say? According to S&P Capital IQ, the company is on track to earn $144.79 million in first-quarter revenue and $0.60 in profit. Both figures would make for a significant improvement over the same period last year ($137.9 million in revenue and a $0.57 per share loss, respectively).

Longer term, analysts have MicroStrategy generating 15% average annual earnings growth over the next 3 to 5 years.

The article MicroStrategy Incorporated Stock Plunges 10% on Q4 Revenue Miss originally appeared on Fool.com.

Tim Beyersis a member of theMotley Fool Rule Breakersstock-picking team and theMotley Fool SupernovaOdyssey I mission. He loves a good strategy game but didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sweb homeandportfolio holdingsor connect with him onGoogle+,Tumblr, or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool recommends MicroStrategy. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.