COGN ($26.$23.$27) Cap=2.3Bil fourth quarter profits beat estimates
(Adds fiscal 2003 guidance. Figures in U.S. dollars unless noted)
By Jeffrey Hodgson
TORONTO, April 10 (Reuters) - Cognos Inc. (Toronto:CSN.TO - news; NasdaqNM:COGN - news) reported an unexpectedly strong fourth-quarter profit on Wednesday, boosted by the reversal of part of an earlier restructuring charge and steady sales of its business intelligence software.
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Cognos, whose software is used to analyze corporate data, said net earnings for the quarter ended Feb. 28 rose to $26.9 million, or 29 cents a share, from $22.1 million, or 24 cents a share, in the same quarter of last year.
But the Ottawa-based company said the net earnings included a reversal of $2.6 million of the $12.8 million restructuring charge recorded in the first quarter of the year because costs were lower than expected. It said without the reversal, fourth-quarter net income per share was 27 cents.
The results bettered street estimates as Thomson Financial/First Call had analysts forecasting, on average, earnings of 22 cents a share for the quarter, with estimates ranging from 20 to 25 cents.
Sales, however, fell to $142.8 million from $144.1 million in the year-before quarter.
Cognos chief executive Ron Zambonini said even with sales down from a year earlier, the company believes the restructuring has made the operation more efficient.
``At the beginning of the year we took out some costs from the company...we've got really quite an efficient model going now,'' Zambonini told Reuters.
``We're pretty optimistic about the future. We think business intelligence is a sector which people will buy if you can show them they're going to get a pretty quick return on their investment.''
For the full year, Cognos said net income fell to $36.2 million, or 40 cents per share, from $64.3 million, or 70 cents, a year earlier. Revenue fell to $491.3 million from $495.7 million the previous year.
Zambonini later told analysts on a conference call to expect stronger sales and profits in fiscal 2003. He said the firm expects to see revenues of $117 million-$118 million in the first quarter and $540 million-$550 million over the full year.
He said the company also expects to report a first-quarter profit of 8 to 9 cents a share, and full-year profit of 68 to 70 cents a share.
Cognos said it promoted chief corporate officer Robert Ashe to chief operating officer, succeeding Terry Hall in a planned transition.
Net cash flow was $46.4 million during the quarter, which boosted its cash position to $314.5 million.
Zambonini said the firm bought back shares in the fourth quarter and would likely continue to do so. But he said the firm had no other major plans to redeploy the capital.
``We have been buying back shares every quarter this year and you'll probably find Q4 was no exception to that...we're always looking for ways to reinvest our capital, but there's nothing on the horizon right now,'' he said.
``We don't have acquisitions right on the blocks right now.''
Cognos shares closed down 21 Canadian cents to C$41.64 in Toronto before the release of the news. The stock has risen more than 5 percent so far this year, outperforming the Toronto Stock Exchange's tech-heavy industrial products subindex, which has fallen more than 17 percent at the same time.
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