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Integrated Research share price on watch after half year profit guidance

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The Integrated Research Limited (ASX: IRI) share price will be on watch today following the release of its half year profit guidance.

What did Integrated Research announce?

This morning the leading global provider of proactive performance management software for critical IT infrastructure, payments and communications ecosystems revealed that it has had a mixed start to FY 2020.

According to the release, although Integrated Research’s revenue is expected to grow modestly in the first half, its profits have not grown at the same rate.

Revenue is expected to be in the range of $52.5 million to $53.5 million during the half. This represents 4% to 6% growth over the prior corresponding period.

This has been driven by solid growth in licence sales. These are expected to be in the range of $32.5 million to $33.5 million, representing 4% to 7% growth on the prior corresponding period. A strong performance by the company’s Unified Communications product line and the continued growth in the Asia-Pacific operation are behind its licence sales growth.

Profit after tax guidance.

Things aren’t quite as strong on the bottom line. Management expects to report a profit after tax in the range of $11.5 million to $12 million during the first half. This compares to a profit after tax of $11.7 million during the prior corresponding period. The low end of its profit after tax guidance range represents a decline of 1.7% and the top end implies growth of 2.5%.

This means another slowdown in profit growth for the performance management software provider.

In the first half of FY 2019 Integrated Research reported a 26% increase in profit after tax to $11.7 million. This growth then slowed in the second half, leading to full year profit growth of 14% to $21.9 million.

I suspect this could put a spot of pressure on its shares when they open on Monday.

Also releasing updates today are Resolute Mining Limited (ASX: RSG) and WISR Ltd (ASX: WZR). Their shares will also be on watch when the market opens.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Integrated Research Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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