Business Objects Jumps on Q4 Profits
By Madan Sheina
February 9, 2005
Excerpted from ComputerWire
Business intelligence software maker Business Objects posted cracking fourth quarter results which even forced a temporary suspension of its shares in Paris Tuesday morning after they jumped more than 15%.
The company overturned a year-ago $8.6m loss for the quarter with a net profit of $21.4m. Revenue for the quarter spiked 45% to $266.7m, from $184.2m a year ago. Significantly, license revenue grew 38% during the quarter on the back of healthy demand for its analysis and reporting software.
Revenue for the quarter did however get a $10m boost from the impact of a strong Euro against the dollar.
Business Objects also points out the loss a year ago factored in charges relating to its acquisition of rival BI vendor Crystal Decisions Inc.
For the full year Business Objects reported revenue of $925.6m, up 65% from last year. Profits for the year stood at $47.1m, up from $22.6m in the previous year.
The results beat Wall Street analyst consensus of $238m revenue for the quarter, forcing several to raise their ratings on Business Objects.
But some believe the company's higher than expected sales should have translated into greater profits. "I'm surprised more fourth quarter revenue couldn't be pulled to the bottom line," said one Morgan Securities analyst.
Uncertainty however still remains over the US Securities and Exchange Commission's ongoing investigation into Business Objects' backlog practices - which refer to contractual agreements with customers that have not yet been formally inked on a vendor's balance sheet.
During its earnings call CEO Bernard Liautaud did not provide any update on the SEC probe which started in May last year.
Business Objects raised is outlook for the current quarter to $235-240m. Liautaud also said the company aims to beef-up its operating margins this year - expecting an increase of around 15% from 13% last year.
Liautaud also announced plans to increase the company's sales force in 2005 to better target small to medium sized firms. Though he did not specify how many people would be taken on board.
Shares of Business Objects were halted limit-up, then opened up 15% in a delayed Paris start yesterday morning. On Monday shares had surged 12% in after hours trading in the US.
In early Nasdaq trading Tuesday Business Objects shares were up nearly 14% at $26.77.
