May 5, 2009 / 11:02 AM / 8 years ago

REFILE-UPDATE 2-Absolute Software Q3 loss narrows, shares down

(Fixes typo in dateline. Adds dropped word in paragraph 1)

* Q3 loss C$0.02/shr vs yr-ago loss C$0.03/shr

* Q3 rev up 36 pct

* Keeps '09 view for cash from ops, sales contracts

* Shares down (Adds detail, analyst comments, updates share movement)

By Isheeta Sanghi

BANGALORE, May 5 (Reuters) - Canada's Absolute Software Corp (ABT.TO) posted a narrower third-quarter net loss, helped by a 36 percent jump in revenue, and maintained its full-year outlook for sales contracts and cash from operations.

The company's shares fell as much as 16 percent before recouping some losses to trade down 39 Canadian cents at C$4.60.

"If the results came in better-than-expected and they had raised their guidance, then I think the stock might have reacted a little more positively," Paradigm Capital analyst Gabriel Leung told Reuters.

The reason the stock is trading down probably reflects the fact that it has gained more than 50 percent over the last one month, Leung added.

The data protection and secure asset trafficking solutions provider posted a net loss of C$1.1 million, or 2 Canadian cents a share, compared with a net loss of C$1.3 million, or 3 Canadian cents a share, in the year-ago period.

Excluding stock-based compensation and restructuring charges, the net loss was C$0.6 million, compared with a net income of $0.1 million a year ago.

"The numbers were slightly better than expected, the only thing that was a bit of a concern was sales to new customers were weak," BMO Capital Markets analyst Thanos Moschopoulos told Reuters. But sales to existing customers were strong, he added.

"Going forward though, they have a bunch of new channel initiatives in place with Best Buy (BBY.N), McAffee MFE.N, Dell DELL.O and HP (HPQ.N), so I expect that looking to 2010 I expect to see a recovery in that," he added.

The analyst said sales to existing customers accounted for 80 percent of sales contracts in the quarter, while those to new customers had a larger-than-expected double digit decline.

Moschopoulos has an "outperform" rating on Absolute Software.

Absolute Software said it expanded its retail reach with Computrace LoJack for Laptops being rolled out to 1,010 Best Buy U.S. stores and online at bestbuy.com.

Another growth aspect for the company includes generally increasing penetration rates of their core product offering further in North America, Moschopoulos said.

Revenue for the quarter ended March 31 rose to C$13.7 million, from C$10.1 million last year. The company's sales contracts were up 13 percent to C$16.9 million.

For 2009, the company reaffirmed its sales contracts expectation of C$70 million to C$75 million, and cash from operations projection of C$16 million to C$18 million. (Editing by Himani Sarkar, Jarshad Kakkrakandy)

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