Cornerstone to acquire Saba for $1.4 billion, reports earnings

Cornerstone OnDemand Inc. shares fell roughly 5% in the extended session Monday after the software company released earnings and said it was going to acquire Saba for $1.4 billion in cash and stock. The company reported fourth-quarter earnings of $9.4 million, which amounts to 15 cents a share, versus a loss of $3.2 million or 5 cents a share in the year-earlier quarter. Adjusted for stock-based compensation, among other things, earnings were 43 cents a share. Revenue rose to $149.6 million from $138.2 million a year ago. Analysts polled by FactSet had estimated adjusted earnings of 34 cents a share on sales of $146.2 million; for the first quarter, analysts model adjusted earnings of 35 cents a share and sales of $157.5 million. The company said it expects first quarter revenue of $147 million and $150 million. Cornerstone also said Monday that it had reached an agreement to buy Saba, which is a "global leader in talent experience solutions," and expects the acquisition to "substantially increase unlevered free cash flow." Cornerstone stock has fallen 5.3% in the past year, as the S&P 500 index gained 19.5%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.