Sales Up, Profits Down At SPSS

SPSS, a Chicago-based maker of predictive analytics software, saw a year-over-year five percent increase in sales in the fourth quarter of 2004, though income declined when factoring in the impact of special tax-related items.

Revenue grew to $60.5 million in the quarter ended Dec. 31, compared with $57.8 million in the same period a year prior. SPSS reported earnings of $3.6 million in the most recent quarter, which included a $1.5 million pretax write-off. Profits in the fourth quarter of 2003 were $6.2 million, which included a one-time tax benefit of $2.3 million.

Looking ahead, SPSS expects first-quarter sales of between $56 million and $58 million, with full-year revenue in the range of $230 million and $235 million.

The stock market reacted favorably Wednesday to the earnings report, and SPSS president and CEO Jack Noonan played up the company's performance, citing a "positive end to a challenging year." License revenue grew across all the company's products, geographic markets and customer segments, Noonan said, with brisk sales of data mining and statistical tools.

"We also saw higher revenues from our new predictive applications, including a hard-fought competitive win at a leading financial services firm," Noonan said in a prepared statement. "These results were achieved without closing any seven-figure transactions in the quarter. Instead, we increased the number of high five-figure and low-six figure contracts."

SPSS signed software license or service agreements in the fourth quarter with Canon, Capital One, the Centers for Disease Control and Prevention, Harley-Davidson, The Ohio State University and the U.S. Drug Enforcement Administration, among others.