Guidewire Software has a Huge Day on the Strength of Earnings Report

Michael Teague |

Guidewire Software has a Huge Day on the Strength of Earnings ReportGuidewire Software Inc. (GWRE), the developer of core systems that support all aspects of property and casualty insurance provision, saw its shares trading for as much as $38.14 by midday, a gain of more than 20 percent from yesterday’s close. Guidewire has a market cap just north of $2 billion.

The strong showing comes on the heels of the company’s fiscal second-quarter earnings report, which indicated an increase in adjusted earnings-per-share of 23.53 percent to $0.21, up from $0.17 in Q2 of 2011, and beating estimates by $0.02.  Revenue for Q2 was also up sharply on the same period in the prior year to $72.2 million, representing 70.5 percent increase,  handily beating analyst estimates of $64.26 million

Additionally, revenue from software licensing came in at $30.8 million, beating consensus estimates of $26 million.

Investment firm Pacific Crest said in a report on Wednesday that demand for Guidewire’s vertical apps is likely to grow in 2013, leading the agency to increase 2013 revenue estimates from $285 million to $290 million, and 2013 EPS estimates from $0.31 to $0.47.

The company’s management touted the role of their increasingly efficient systems for the company’s success.

“These systems—with capabilities such as support for customer self-service and real-time transactions, templates for faster deployment of new products, and design tools that make common product changes accessible to nontechnical users—promise improvements in speed and flexibility that are orders of magnitude greater than legacy policy systems.”

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Companies

Symbol Name Price Change % Volume
GWRE Guidewire Software Inc. 59.98 -0.04 -0.07 586,271
KFN.P KKR Financial Holdings LLC Pfd Ser A Llc 26.72 0.12 0.45 12,979

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