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7/31/2003
08:26 PM
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Business Objects Gets Sales Growth Back--At A Price

Business Objects' sales grew this quarter, but higher costs cut into profits.

Business Objects SA, riding sales of its recently upgraded product line, Thursday reported 16% revenue growth for its second quarter ended June 30. Higher operating expenses, however, kept net income for the quarter slightly below last year's earnings.

The company reported sales of $129.0 million for the quarter, up 16% from $111.2 million in the same period one year ago. While much of the growth was in software license update and service revenue, software license sales--a key growth indicator--were up 3% to $62.7 million.

The software license sales growth reverses a worrisome drop in license sales over the previous four sequential quarters. Sales of the vendor's Enterprise 6 product line, which began selling in May, may have provided the needed boost. Data-integration product sales also were strong, the company said.

Net income was $11.5 million or 18 cents per share, down slightly from $11.9 million or 18 cents per share one year ago. The results don't include Crystal Decisions Inc., the query and reporting software vendor Business Objects is in the process of acquiring.

For the current quarter ending Sept. 30, Business Objects expects revenue in the range of $121 million to $124 million and earnings in the range of 14 cents to 17 cents per share.

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