Blackbaud Earnings Better Than Expected

Some large software deals coupled with cost-cutting measures helped Daniel Island-based Blackbaud Inc. post better-than-expected earnings.

While a $2 million decline in licensing fees helped drag total revenue down about 1 percent to $79.2 million, the company's profit surged 34 percent to $9.8 million compared to the third quarter last year.

The results were helped by what the company described as "couple of large ... deals that closed and were recognized" between July 1 and Sept. 30.

On per-share basis, earnings for the quarter came in at 26 cents, beating estimates by about three to four cents.

For the first nine months of the year, Blackbaud's profit is down 12 percent to $20.5 million compared to the same period of 2008. Revenue is up about 4 percent to $230 million.

"While the market environment remains challenging, Blackbaud is making steady progress in strengthening its market position," said Marc Chardon, chief executive officer, in a statement.

Blackbaud makes and services financial software for the nonprofit industry. It released its latest financial report Wednesday, after U.S. stock markets had closed. Shares of the company jumped nearly 8 percent, or $1.64, to close at $22.82 Thursday.

Blackbaud said revenue from software subscriptions increased 23 percent in the latest quarter to $19.2 million, while maintenance sales rose 8 percent to $29.7 million.

"We continue to see the largest nonprofit organizations moving forward with technology investments in order to optimize their fund-raising activities in the current economic environment, while also driving operational enhancements that will benefit their organizations long-term," Chardon said .

He also said Blackbaud "is well-positioned for enhanced growth when the economy eventually improves."

The software company's lowered its operating expenses in the most recent quarter by 7 percent to $34.8 million, led by a $2.4 million cut in general and administrative costs. The company also reduced sales and marketing spending by about $904,000.

Timothy Williams, chief financial officer, said "our worldwide organization continued to identify incremental expense savings and to focus on how to improve the efficiency of our operations."

Also this week, Blackbaud declared a fourth-quarter dividend of 10 cents a share payable Dec. 15 to stockholders of record Nov. 27.