BEA Systems Profit Climbs 18%;CEO Says Firm 'Not in Jeopardy'
By MARCELO PRINCE DOW JONES NEWSWIRES
August 13, 2004
BEA Systems Inc.'s net income rose 18% for the fiscal second quarter as growth in services to existing customers offset a decline in new software sales.
The results were in line with the software maker's reduced forecasts. Last week, BEA warned that total revenue and software-license sales fell slightly short of its targets for the three months ended July 31.
Net income increased to $30.6 million, or seven cents a share, up from $25.9 million, or six cents a share, a year earlier. Total revenue rose 7% to $262.3 million from $245 million, but sales of new software licenses fell 9% to $116.3 million.
The San Jose, Calif., company has struggled to boost sales of its newer products and faced stepped-up competition from bigger rivals, including International Business Machines Corp., in its core application-server market, analysts said.
Chairman and Chief Executive Alfred Chuang called "silly" recent reports from market-research firms such as Gartner Inc. and Meta Group Inc. questioning the firm's stability in light of the departure of several top executives. He said the company has filled the positions and that recent results show "the company is not in jeopardy."
BEA's application server has become a "commodity product" and continues to face pricing pressures from IBM as well as open-source-software alternatives, such as JBoss, said Jason Brueschke, software analyst at Pacific Growth Equities.
BEA executives said fiscal third-quarter earnings and revenue may fall short of analysts' estimates as market conditions continue to be challenging. Mr. Chuang predicted BEA's third-quarter revenue could grow as much as 3% or fall as much as 3% from the second quarter's $262.3 million. Analysts had expected third-quarter revenue of about $270 million, up 3% from the second quarter.
Shares of BEA Systems, which have fallen more than 50% so far this year, rose slightly in after-hours trading. The stock was at $6.22, up from its 4 p.m. close of $5.96 on Nasdaq |
