Open Text Corporation | $OTEX Stock | Shares Fall as Company Misses on Q3 Earnings

Open Text Corporation

Open Text Corporation (NASDAQ: OTEX)



Open Text Corporation (OTEX), a software products and services company yesterday reported their fiscal third quarter 2017 financial results. Open Text Corporation reported third quarter net income of $21.6 million.

Open Text Corporation reported third quarter adjusted earnings of $0.45 per share. Open Text Corporation reported third quarter revenues of $593.1 million.


Open Text Corporation CEO’s  Comments

“It was a milestone quarter for OpenText as revenues reached $600 million with 36% year-over-year growth (in CC) and operating cash flow grew 46% quarter-over-quarter,” said OpenText CEO and CTO, Mark J. Barrenechea. “We are a market leader in Enterprise Software for Digital Transformation and customers are responding favorably to our expanded portfolio of customer experience management, vertical content solutions, and discovery offerings.  We have invested approximately $2.4 billion in acquisitions over the last twelve months, and while the financial benefits are evident in our quarterly results, they are yet to be fully realized.”

Barrenechea further added, “Our first principle is long-term growth in intrinsic value.  Over the past four years, we have returned over $400 million to shareholders via dividends and cash used for share buybacks. Our ability to deploy capital continues to expand, our financial position is strong and our outlook is positive. Today we are announcing a 15% increase to our quarterly cash dividend to $0.132 per share.”  PR Newswire


OTEX Technical Analysis


Open Text Corporation
Open Text Corporation Chart

OTEX opened trading yesterday at $34.80 which was down from the previous day’s trading close of $34.82. OTEX closed trading yesterday at $34.83 and crashed down after market to $31.47, equivalent to a 10% decrease from the closing price. Taking a look at the daily chart we can see that the last time OTEX traded below these levels we have to go back to January 19th when it traded at $31.27.

Taking a closer look at the daily chart we can see that before the spike down OTEX had been in an overall upward trend dating back to November 14th, 2016 when it traded at $29.52. OTEX has a float of 256.82 million shares and traded below the normal daily trading volume on Monday.

For trading purposes, I would like to see OTEX open trading on Tuesday below $32.60 and if it does I would be looking to take a short position at the bell. My stop loss would be $0.25 from my entry position fearing anything more than that and the stock would start to fill in the gap down.


Company Profile

Open Text Corporation provides a suite of software products and services that assist organizations in finding, utilizing, and sharing business information from various devices. The company offers enterprise content management products that provide content and records management, archiving, and email management and capture solutions, as well as Core, a software as a multi-tenant cloud solution; business process management for analyzing, automating, monitoring, and optimizing structured business processes; and customer experience management products, which offer Web content management, digital asset management, customer communications management, social software, and portal.

Its products also comprise business network solutions comprising business-to-business integration, fax solutions, and secure messaging; analytics solutions, including embedded reporting and visualization, and big data analysis; and discovery solutions consisting of search, semantic navigation, and auto classification, as well as InfoFusion to deal with the issue of ‘information silos’ resulting from disconnected information sources across the enterprise. In addition, the company provides customer support programs that include access to software upgrades, a knowledge base, discussions, product information, and an online mechanism to post and review trouble tickets.

Further, it offers professional services, such as consulting and learning services relating to the implementation, training, and integration of its product offerings into the customer’s systems; and cloud services that allow its customers to make use of its OpenText software, services, and content over Internet enabled networks.

The company serves organizations, mid-market companies, and government agencies worldwide. It has strategic partnerships with SAP AG, Microsoft Corporation, Oracle Corporation, Accenture plc, Deloitte Consulting LLP, and others. Open Text Corporation was founded in 1991 and is headquartered in Waterloo, Canada.  Yahoo Finance