Magic Software Enterprises Q4 Profit Down - Quick Facts

(RTTNews) - Magic Software Enterprises Ltd. (MGIC) reported that its net income attributable to Shareholders for the fourth quarter ended December 31, 2014 declined to $2.82 million from the prior year's $4.69 million, with earnings per share decreasing to $0.06 from $0.13 last year.

Non-GAAP net income attributable to shareholders was $5.621 million, down from $5.971 million in the prior year. Non-GAAP net earnings per share dropped to $0.13 from $0.16 in the previous year.

In August 2009, a software company and one of its owners filed an arbitration proceeding against the company and one of its subsidiaries, claiming an alleged breach of a non-disclosure agreement between the parties. The arbitrator determined that both the company and its subsidiary breached the non-disclosure agreement. In January 2015 the arbitrator rendered his ruling and determined the damages that they (and one of its subsidiaries) should pay the plaintiffs. Therefore, its financial results of operations for the fourth quarter include a net impact of $1.6 million resulting from the arbitration.

Revenues for the fourth quarter increased 3% to $42.5 million from $41.2 million in the corresponding quarter in 2013. Revenues for the quarter were negatively impacted by an approximately $1.5 million devaluation of foreign currencies versus the US Dollar (mainly the Euro and Japanese Yen) and the appreciation of the New Israeli Shekel versus the US Dollar.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.11 per share and revenues of $42.35 million for the quarter. Analysts' estimates typically exclude special items.