Jul 28, 2004 (05:07 PM EDT)
Business Objects Outpaces 2Q Estimates

Read the Original Article at InformationWeek

Business Objects beat the Street's earnings expectations in the second quarter, though it lowered its sales forecast for the current quarter due to a strengthened U.S. dollar.

The business intelligence software giant reported revenue of $222.2 million in the quarter ended June 30, up from $129 million in the same period last year. Earnings were flat at $11.5 million, though they rose on a per-share basis. Pro forma profit was 20 cents a share, two cents ahead of estimates.

"The quarter was quite good, especially considering that in general IT software spending has been hit hard recently," Business Objects CEO Bernard Liautaud told Business Intelligence Pipeline. "We've continued to increase our number of large deals."

Business Objects closed eight transactions worth more than $1 million in license revenue in the quarter, and another 91 transactions worth between $200,000 and $1 million.

Liautaud said strong sales in Europe, in particular, helped Business Objects' performance in the quarter. Revenue from Europe hit $100.9 million, up 28% from the same period last year. Sales in the Americas, which fell 2% to $111.2 million, were hurt by a soft IT spending environment, particularly late in the quarter.

Business Objects projects sales of between $215 million and $220 million in the third quarter ending Sept. 30, down from guidance it provided in April.

The reduced forecast reflects a stronger U.S. dollar, combined with "caution in light of the tighter IT spending environment experienced throughout the software industry," Business Objects said.

The company also announced that president and chief operating officer John Olsen will be leaving Business Objects at the end of the third quarter to pursue other interests. A search for his successor is underway, the company said. Olsen will remain on the board of directors.

Business Objects released version 6.5 of its BI software in June, the latest step in the integration of its own technology with that of Crystal Decisions, which Business Objects acquired in December for $1.2 billion. Though the recent release of the new product meant it had "virtually no impact" on results for the second quarter, Liautaud said the product has poised Business Objects for continued growth.

"We feel very strong about the product," he said. "We’ve been able to bring together Crystal and the Business Objects product sets in a much more integrated way than we thought we would."