from today's globe&mail
Open Text's quarterly revenue jumps 10% on
strong licence sales
Showwei Chu
Open Text Corp. said yesterday fourth-quarter revenue rose 10 per cent on
stronger software licence sales because of post-Y2K demand from business
customers.
The Waterloo, Ont.-based software developer said revenue rose to $32.3-million
(U.S.) from $29.4-million in the year-earlier period.
Profit, excluding good will in the fourth quarter ended June 30, was $3.6-million or
16 cents a share, compared with $5.4-million or 21 cents in the same period a year
ago.
That beat an average per-share earnings forecast of 5 cents from six analysts polled
by First Call/Thomson Financial.
Shares of Open Text, which reported results after the close of markets, rose 38 cents
to $23.06 on Nasdaq yesterday.
Open Text realized its biggest growth in licence revenue in any 90-day period in the
company's history because customers are past their Y2K concerns, said Thomas
Jenkins, Open Text's chief executive officer.
"Y2K had a dampening effect on Open Text in the last couple of quarters," said Mr.
Jenkins in an interview. "June was our first quarter that was really free of all that."
Mr. Jenkins said he expects the company to begin generating revenue from its new
business-to-business e-commerce and application service provider initiatives in the
next quarter.
Open Text first announced in February that it had established a new division that
would operate a Web site called b2bscene.com. That on-line site allows customers
to do a number of things, such as find information, exchange documents and complete
business transactions with other companies.
Some analysts had said earlier that they expected the site to make money by the end
of the year.
"It's been an expense on the balance sheet and they haven't the benefit from any of
that yet," said Joseph Vejvoda, an analyst at TD Securities Inc., who follows the
company. He had a per-share-earnings forecast of 4 cents on projected revenue of
$31.1-million in the fourth quarter.
He said the business portal has an advantage over others because Open Text can tap
into the company's existing base of four million software users.
"The traffic that will go to that page will be huge," he said.
To expand its software sales channels, Open Text said it has signed an agreement
with Cowan Insurance Group and AOL Canada Inc. to be an application service
provider. The first ASP agreement for the company, announced in March, was with
KPNQwest, a joint venture between Qwest Communications International Inc. and
KPN Telecom BV, a Dutch ISP.
Open Text is trying get more revenue by offering software to small and medium-sized
businesses through alliances with Internet service providers. Its main business has
been selling its knowledge management software to large enterprises such as AT&T
Corp. and Andersen Consulting.
"If someone is subscribing to you for Internet access, it's a no brainer that he can
subscribe to you for additional services and get some software," Mr. Vejvoda said.
happy investing
andras |
