Tomahawk, WI 11/08/2013 (BasicsMedia) – It is doubtable whether there is a bigger cloud company in the world than Citrix Systems, Inc. (NASDAQ:CTXS). Its systems and solutions are sold all over the world. CTXS announced its latest quarterly financial results and it emerged that they missed expectations. The quarterly financials did not miss the expectations by a large margin, but it was significant enough to cause a negative reaction in the market when CTXS’s stock dropped. The company said that it is disappointed in its quarterly results, but the fact that it reported earnings is quite impressive.

CTXS Net Income Surpasses Net Income Expectations

CTXS’s net income surpassed all expectations and this is commendable. The reason I say this is the adverse global economic conditions that create a bad environment for businesses. CTXS operates in a very competitive industry that enjoys the services and products offered by some of the major global brands in the tech world. CTXS has embarked on a share buy-back program worth around $500 million, which the board has approved. I am deeply interested in the company’s share buy-back program and want to look at its risks and benefits.

CTXS Share Buy Back Program is Impressive

I think the board is justified with its decision to embark on the share buy-back program. It seeks to reduce the number of shares that are currently in the market. Secondly, by reducing the amount of shares still available in the market, the board of CTXS has increased the value of the stock. Since the demand for this cloud computing company’s shares will shoot up, this will inevitably, increase the value of the stock. Therefore, this move will bring in more finances into the company, and attract investors from various corners. The board’s decision is strategic.

A school of thought suggests that the decision by CTXS board to approve the share buy-back program is informed by the fact that certain shareholders wanted to gain a controlling stake in the company. This could have led to a period of great turmoil and boardroom wars, hence the strategic decision by the CTXS board to approve the program that seeks to mop up all the extra shares in the market. CTXS needs a calm environment in order to increase its revenues and declare profits for an extended period. The goals are impossible to achieve during turmoil.

The share buy-back program undertaken by CTXS allows the company to control more of its stock. This ensures it has the majority voice in the company and can make decisions more efficiently without too much interference. Regardless of the reasons behind the decision by CTXS board to approve the share buy-back program, I have no doubt that it will end well and produce desirable results in the long-term. CTXS has the best solutions in cloud computing in the whole world, therefore, I see no cause for alarm by investors or Wall Street.

CTXS has to increase its efforts in terms of marketing its solutions and cloud computing systems across the globe. It needs to invest in improving its brand recognition globally since this will help it to attract more customers, and improve its sales. Similarly, this will help CTXS to enjoy better financial results, while continuing to declare increasing net incomes.

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