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Websense shares get a boost from new CEO, billings

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John McCormack. Courtesy of Websense

Shares of San Diego-based Websense Inc. rose Monday after the data security company named a new CEO and announced better-than-expected fourth-quarter billings.

The company said late Sunday that its board named John McCormack CEO, effective immediately. He replaces Gene Hodges, who is retiring after serving as CEO since 2006.

McCormack joined the company in 2006 as senior vice president of product development and was named president in 2009.

Websense (Nasdaq: WBSN) also said its fourth-quarter billings rose 5 percent to a record $122 million, beating the company's prediction of $112 million to $117 million.

The higher-than-expected billings prompted the company to revise its profit and revenue predictions for the quarter.

Websense said that as a result of higher sales commission expenses stemming from the jump in billings, it now expects to post adjusted earnings of 27 or 28 cents per share for the quarter, down from its previous guidance of 32 to 35 cents per share.

The company also narrowed its revenue prediction to a range of $91.5 million to $92 million. It previously projected $90 million to $92 million.

Analysts, on average, expect earnings of 34 cents per share on $91.3 million in revenue, according to FactSet.

Websense plans to release its full financial results for the quarter after the market closes on Jan. 29.

Citi analyst Walter Pritchard noted that McCormack's responsibilities have increased over the past three years, making his CEO appointment less than a complete surprise.

"The company had been struggling to hit forecasts and deliver growth and thus investors will likely receive a leadership change positively," Pritchard wrote in a note to investors. "We do believe, however, that some investors were hoping for an outsider to come in."

Pritchard, who backed his "Neutral" rating for Websense, added that even though the company had to cut its profit guidance as a result of the higher-than-expected billings, the jump in business is still good news.

Websense shares gained 38 cents, or 2.5 percent, to close Monday at $15.36, after peaking at $15.88 earlier in the day. Over the past 52 weeks, the stock has traded between $12.70 and $22.15.

Websense shares lost about 20 percent of their value last year.


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Websense Inc.

Company Website

10240 Sorrento Valley Road
San Diego, CA 92121

Websense Inc. Executive(s):

John McCormack

  • Chief Executive Officer

Jim Hagan

  • Chief Financial Officer

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