BEA Beats the Street, Cuts Outlook

Aug 14 2001

E-business software maker BEA Systems on Tuesday posted pro forma second-quarter earnings of 10 cents a share, beating analysts' forecasts by a penny, but lowered its guidance for the rest of year because of the shaky economy.

The San Jose, Calif.-based company, which makes server software, said revenue for the quarter rose to $267.8 million from $186 million in the year-ago quarter. Pro forma net income, which excludes one-time charges, was $43.9 million, up from $21.9 million a year earlier.

While the headline numbers beat forecasts, the company reduced guidance for the fiscal year to pro forma earnings of between 39 cents and 41 cents a share, down from the earlier range of between 41 cents and 43 cents a share. The revision stood in stark contrast to last quarter's earnings, when the company raised its full-year guidance.

"We believe it is appropriate to adjust our guidance to be more conservative given the continued weakness in the worldwide economic environment, particularly in IT spending," said Bill Coleman, the company's chairman and CEO.

For the second quarter, the company grossed $172.2 million from license fees, up 65 percent from $104.2 million posted the same quarter last year, and $95.6 million from services, up from $81.83 million. Including charges, net income was $24 million in the quarter up from $2.27 million a year earlier.

"The company currently expects revenue to be essentially flat [for the third quarter], sequentially followed by a low- to mid-single-digit sequential growth in the fourth quarter," said CFO Bill Klein.

In regular-session trading, the company's shares rose 54 cents, or 3 percent, to $ 18.60. In the late session, investors bid up the shares as high as $19.49.