MicroStrategy Shares Fall on 4Q Results

At least two analysts rebuked Microstrategy management for overspending and refusing to speak to Wall Street.

The company said Friday it earned $17.7 million, or $1.41 per share, versus $22.4 million, or $1.68 per share, in the year-ago quarter. Sales rose to $97.6 million from $92.6 million.

Analysts polled by Thomson Financial expected profit of $1.72 per share on revenue of $105.5 million. Analyst estimates typically exclude one-time items.

For the year, Microstrategy earned $58.5 million, or $4.55 per share, compared with $70.9 million, or $5.20 per share, in 2006. Revenue rose to $350.7 million from $313.8 million.

Analysts expected earnings of $4.86 per share on revenue of $358.6 million.

In a strongly worded note to investors, Cowen and Co. analyst Peter Goldmacher wrote that the results were well short of expectations, and complained that management refused to discuss its business with Wall Street analysts.

"We would continue to avoid the stock given the significant deterioration in fundamentals over the course of 2007 and management's refusal to communicate with the Street to set expectations, making the stock a rudderless ship," Goldmacher said.

"While 2008 could be a better year, we'd prefer to own almost any other stock in software," he added.

Wedbush Morgan Securities analyst Michael Nemeroff said the company's shortfall in license revenue suggests that its execution is going from bad to worse.