Enterprise data provider Informatica (click ticker for report: ) warned of lower-than-expected third quarter results. The firm expects to earn just $0.25-$0.27 per share, short of the consensus of $0.34 per share, with revenue coming in at $189 million to $191 million, worse than the consensus estimate of $200.65 million.
Echoing what we’ve heard during the firm’s second quarter, Europe remains weak even as revenue from Asia and the US continues to gain positive momentum. The firm also blamed the decline in European revenue for negatively impacting the tax rate for 2012, leading to the downward earnings outlook.
We weren’t at all surprised by the firm’s announcement, and we think enterprise demand in Europe will remain weak for the rest of the year. However, we have no doubt that business investment will return to the austere region, though the timing of such a rebound is hard to tell. Regardless, Informatica scores a 3 on the Valuentum Buying Index (our stock-selection methodology), so we’re staying away from shares at this time.