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7/24/2002
02:44 PM
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Bucking The Trend

Unlike many other software vendors, Business Objects and Crystal Decisions report solid sales increases.

Business-intelligence application vendors continue to buck the software-industry sales slowdown. Business Objects SA and Crystal Decisions on Wednesday reported solid sales increases for the June quarter.

Why are sales of business-intelligence applications growing despite the uncertain economic recovery? The need to improve management's visibility into business, combined with closer scrutiny of financial operating results, is driving demand, Business Objects CEO Bernard Liautaud says. Unlike other software products that carry six- and even seven-figure price tags, Business Objects' average deal is $41,000 "and the return on investment is very clear and fairly rapid," he says.

Privately held Crystal Decisions reported revenue of $61.4 million for its fourth quarter ended June 28, a healthy 32% increase from the same period last year. License revenue increased 30% from one year ago. CFO Eric Patel says the company increased its profitability and was cash-flow positive in the quarter. For the fiscal year ended June 28, Crystal Decisions reported revenue of $217.2 million, up 29% from fiscal 2001. License revenue for the fiscal year was up 31%.

Business Objects reported that revenue increased 10%, to $111.2 million, for its second quarter ended June 30, compared with $101.5 million in the same period last year. Net income was $11.9 million, or 18 cents per share, up 8% from $11.0 million one year ago. Sales in the Americas were up 40% year over year, although that was partly offset by slower sales in Europe where the economy is weaker.

License fees were down slightly to $60.9 million, from $61.0 million last year. License revenue for analytic applications was $4.5 million, up 128% from last year, while license and service revenue from extranet products was down 10%, to $19.6 million. Extranet projects tend to be among the first postponed in a down economy because they're new technology rather than additions to existing systems and the ROI is less immediate, Liautaud says. Service-related revenue increased 24%, to $50.3 million.

Business Objects expects revenue for the current quarter to range from $108 million to $110 million with earnings of 2 to 4 cents per share. That includes an estimated charge of 11 cents per share for the company's pending acquisition of Acta Technology Inc.

Brio Software Inc. also reported earnings growth for its first quarter ended June 30, despite slower sales than last year. The business-intelligence software supplier posted net income of $1.8 million, or 5 cents per share, on sales of $26.1 million, compared with the $7.6 million loss, or 26 cents per share, it reported on sales of $29.5 million one year ago. Brio has greatly reduced its operating expenses to bring the company back into the black.

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