FalconStor Software Reports Better-Than-Expected Results (FALC)

FalconStor Software (NASDAQ: FALC) has reported better-than-expected results for the third quarter, leading to an increase in share price of more than 23% on Thursday. The third-quarter revenue was $17.1 million against the consensus analyst estimate of $16.47 million. However, Q3 2012 revenue has declined by over 9% over the same period the previous year. The good news is that revenues have increased by 4% compared to the previous quarter. FalconStor’s EPS is still in the negative with a loss of $0.44 per share. FalconStor management is taking steps in consultation with Wells Fargo to improve the fundamentals and increase the value for shareholders.

FalconStor has attributed the improved revenue figures to the steps taken to bring down operating expenses to better align with the global economic situation. It added that these steps would enable FalconStor to invest in existing and new products to further improve financials.

Strategic Advisor Appointed

FalconStor also announced that it has retained investment banking firm Wells Fargo Securities as an exclusive financial advisor to help explore and evaluate strategic alternatives to maximize stockholder value. FalconStor will disclose the new steps it intends to take as a result of these consultations only after the Board approves of them.


FalconStor has posted a GAAP loss from operations for the quarter of $3.6 million, against $5.1 million for the same period in the previous year. The GAAP net loss for the third quarter of 2012 was $3.6 million, or $0.08 per share, against $5.4 million, or $0.12 per share in the same period the previous year.

The non-GAAP operations loss for Q3 2012 was $3.1 million against $2.3 million in the same quarter a year ago. FalconStor has posted a non-GAAP net loss of $3.1 million against $2.6 million for the third quarter the previous year. FalconStor also claimed deferred revenue of $23.6 million as of September 30, 2012, which is a 5% reduction from the previous year.

About FalconStor

FalconStor is a provider of disk-based data protection. FalconStor offers data protection solutions that enable the availability of business-critical data. FalconStor specializes in disk-based data protection, data virtualization, continuous data protection, disaster recovery automation and more. FalconStor products include the virtual tape library. FalconStor uses an open software-based approach to storage and retrieval enabling connectivity across systems.

Market Movement

FalconStor has recorded a 52-week low of $1.69 and a 52-week high of $3.96. FalconStor closed trading on Thursday at $2.48 per share, recording an increase of 23.4%. The volume of shares traded was 427,386.

Apart from FalconStor, other tech companies that displayed a significant increase in share prices include Perion Network (NASDAQ: PERI) that recorded a 15.6% increase to reach $9.02. In all, 609,464 shares of Perion were traded.

Shares of Sapient (NASDAQ: SAPE) recorded a 15.6% increase to reach $11.44 with 3.8 million shared being traded.

Yet another tech stock that saw a sharp and impressive increase in price on Thursday is that of EZchip Semiconductor (NASDAQ: EZCH). The shares went up by 14.6% to $34.80, with 2.9 million shares being traded.

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Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing. http://www.facebook.com/ben.rouss