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BEA Systems Inc. reported Thursday a solid fourth quarter, having closed 26 orders of more than $1 million for its Web infrastructure development products.
The San Jose, Calif., company's revenue was $231.3 million for the fiscal 2002 fourth quarter ended Jan. 31, a 9% drop from last year's fourth quarter. Pro forma net income, which is the company's income minus one-time charges such as acquisition fees, was down 28%, to $31.3 million. Still, BEA executives and analysts consider the earnings strong in light of the poor economy, and BEA saw growth in both income and revenue since the fall quarter. "These are excellent results of what was obviously a very difficult economy," says Alfred Chuang, the company's founder, president, and CEO. "We're increasing our market share and closing a lot of large deals."
The company's WebLogic product line includes application servers, integration tools, and portal software for building Web-based applications and transactions. Services accounted for 40% of its revenue in the quarter.
BEA's report was in line with what many analysts were expecting, and it beat some expectations. "It's a pretty strong quarter," says Jason Maynard, a financial analyst with Wachovia Securities. "BEA is the market leader in the application server sector, and theirs is the key infrastructure for any of the modern Web-based developments. It's a strategic platform, and they've executed well."
Without the one-time charges consideration, BEA's income for the quarter was just $10.6 million. But Maynard says the pro forma results better reflect the company's performance. For the year, BEA's revenue was up 19%, to $975.9 million, and pro forma income increased 23%, to $135.4 million. Without the pro forma consideration, BEA would have reported a loss of $35.7 million for fiscal 2002.
Chuang says BEA is set to introduce a slew of products next week and is cautiously optimistic for "steady growth" this year. The company is expecting revenue to dip down to between $220 million and $225 million for the current quarter, but says that's primarily because of seasonal fluctuations in sales. Still, one of BEA's biggest challenges may be finding new customers looking to start big projects: Says Chuang, all of the $1 million-plus deals BEA made in the quarter were with existing customers.