VASCO Data Security International (VDSI) Jumps As Earnings Beat Expectations
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Shares of Oakbrook Terrace, Illinois, based VASCO Data Security International (VDSI) rose sharply on Tuesday, against the backdrop of a strong day in stocks overall. VASCO's stock was up 29.74%, rising $5.44 per share, to close at $23.73 on volume of 4,424,429 shares. The security software company beat analysts estimates for both revenue and net income for the third quarter.
VASCO reported that revenue from continuing operations for the third quarter, ended September 30, 2014, increased 34% to $52.6 million, up from $39.2 million in the same period of 2013. For the first nine months of 2014, revenue increased 24% to $139.1 million, up from $111.8 million for the first nine months of 2013. Analysts surveyed by Thompson Reuters had expected revenues of $42.8 million for the quarter.
The company also reported that net income from continuing operations for the third quarter of 2014 was $11.2 million, or $0.28 per diluted share. This represented an increase of $7.8 million, or 233%, from $3.4 million, or $0.08 per diluted share, for the third quarter of 2013. Analysts had expected $0.14 per share.
Net income from continuing operations for the first nine months of 2014 was $21.6 million, or $0.55 per diluted share, an increase of $14.0 million. This represented a 184% increase over the same period last year, up from $7.6 million, or $0.19 per diluted share.
The company is increasing guidance for revenues and operating margins for the full year 2014. Revenue from VASCO's traditional business is expected to come in at $190 million, compared to the previous guidance setting revenues at between $175 million and $180 million.
"The results for the third quarter reflected a 37% increase in revenues from the Banking market and a 23% increase in revenues from the Enterprise and Application Security market," reported VASCO President and COO, Jan Valcke. "The growth in the Banking market reflected strong demand from both existing and new customers. In Q3, we also saw strong demand for our relatively new products that increase the level of security along with user convenience, such as our products that use the CrontoSign technology, and products that support new applications, especially mobile applications. The growth in the Enterprise and Application Security market is being driven in large part by growth in our maintenance revenues, which shows us that our strategy of focusing on software with related maintenance is working well."
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