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Interactive Intelligence shares sink after quarterly report

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Interactive Intelligence Group Inc. shares fell 25 percent in trading Tuesday morning, erasing more than $150 million in market value for the Indianapolis-based software maker.

The tumble followed a third-quarter earnings report that disappointed investors. Earnings at Interactive Intelligence fell 6 percent from the same quarter of 2010, well below analyst expectations, despite a 25-percent increase in revenue, the company announced late Monday.

Shares fell by more than $8, to $25.19 each, on Tuesday, flirting with a 52-week low.

Company executives said on a conference call with analysts Monday that some clients put orders on hold as the economic outlook darkened in recent weeks.  

“I think things got a bit scary for a while from an economic perspective, and we’re working on pretty big contracts here,” said Paul Weber, the company’s vice president of sales for North America. “It’s certainly nothing from a competitive perspective—we’ve never been positioned better than we are right now.”

Profit for the quarter ended Sept. 30 was $3.3 million, or 16 cents a share, compared to $3.5 million, or 19 cents per share, a year ago.

Revenue rose from $41.8 million to $52.1 million. But operating expenses jumped 29.5 percent, to $30.1 million, as the company experienced higher-than-expected growth in its cloud-based product line.

Orders for the company’s cloud-based software, which is accessed via the Internet rather than hosted at the customer’s premises, more than doubled in the third quarter, to 31 percent of total orders.

Cloud “is now the fastest growing part of our business,’’ company co-founder and CEO Donald Brown told analysts during the conference call.

Company executives played down quarterly earnings that came in well below analysts’ consensus prediction of 31 cents a share, saying Interactive sees its growth in cloud computing as a way to pass larger, traditional competitors amid the market shift.

Total company orders rose 14 percent, including 54 new customers.

Interactive Intelligence also recorded accounting adjustments related to three previous acquisitions, as well as expenses for stock options of $1.4 million, or 7 cents a share.

On the upside, the company scored the largest deal in its history, a $10 million cloud contract order.

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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