Profits soar at Cognos Firm out-gains expectations
By SUSAN TAYLOR, Ottawa Sun
COGNOS Inc. beat analysts' estimates for its fourth quarter,
but the software company plans on aggressive expansion to
maintain its market lead.
The Ottawa firm recorded a profit of $20.5 million US, 47cents a
share, on sales of $86.9 million. The consensus estimate from five
brokers polled by First Call Corp. was 43cents US for the
quarter.
The results exclude onetime charges related to the acquisition of
Relational Matters and LEX2000 Inc. Including those, there was
a profit of $17.2 million, 39cents a share.
In the same period last year, Cognos recorded a profit of $17
million, 38cents a share, on sales of $70.7 million.
For the fiscal year, the company recorded a profit of $61.8
million, $1.39 a share, on sales of $301.1 million, excluding
onetime charges. In the previous year, Cognos saw a profit of
$50.6 million, $1.11 a share, on sales of $244.8 million.
Those results position the company as the leader in the business
intelligence market. To hold that lead with increasing and
"ferocious" competition, officials say Cognos will invest in staff
and product development in the year ahead.
"Competition is increasing, which is actually good," said Alan
Rottenberg, senior vice-president of marketing and business
strategy. More players means customers become better educated
and make purchase decisions more quickly, he added.
Cognos will expand its sales force and software developers to
ensure it's present "whenever there is a sales opportunity related
to business intelligence," Rottenberg said.
The company will also add staff and services partners to help
customers better use its business intelligence tools: PowerPlay,
Impromptu and DataMerchant.
Those BI products made up $70.6 million of Cognos revenue in
the fourth quarter, up 33% from the same period last year. For
1999, BI sales hit $231 million, up 31% from the previous year.
Product plans are aimed at modifying some tools and adding
common features, such as easier security, across product lines.
That's meant to lower the cost of ownership, ease administration
and make the software easier to deploy. "A lot of investment will
be made," said Rottenberg.
Cognos shares fell $2.35 to close at $34 on the TSE yesterday
before the results were released.
That's well below the value chief executive Ron Zambonini has
said he expected.
"Management essentially focuses on delivering the results quarter
after quarter," said Rottenberg. "It feels that over time, our share
value will recognize these efforts." |
