Hyperion Quarterly Earnings Edge Downward

Revenue rose for Hyperion Solutions in the company's fiscal second quarter, but the business intelligence software firm reported a decline in earnings as a result of one-time costs and stock-based compensation expenses.

Hyperion reported sales of $185.5 million in the quarter, up 5 percent over the $177 million the company reported in the same quarter last year. Net income came in at $15.5 million, just short of the $15.6 million Hyperion reported last year. Fiscal 2006 results the impact of equity-based compensation; fiscal 2005 results do not.

Software license revenue increased 9 percent to $74.4 million in the most recent quarter, while maintenance and services grew a more modest 2 percent to $111 million. Hyperion credited the market's acceptance of Hyperion System 9, released in Oct. 2005, for the improvement in license revenue.

"License and revenue growth was driven by the success and momentum of System 9, which generated more than 50 percent of our license revenue and accounted for the majority of our large transactions," said Hyperion president and chief executive officer Godfrey Sullivan. "We're very pleased to report another quarter of strong execution during our exciting product launch."

Hyperion also handed in a third-quarter forecast that was more conservative than Wall Street analysts' consensus estimates. The company projected sales of between $183 million and $188 million, with a per-share profit of 32 cents to 36 cents per share. Analysts had predicted sales of about $189 million with earnings falling at the high extreme of Hyperion's per-share outlook.

Hyperion's balance sheet for the most recent quarter declined slightly from the last quarter, to $425.4 million at the end of December 2005, versus $436.5 million at the end of September 2005.

New contract wins for Hyperion in the second quarter included Cadbury Schweppes, the National Australia Bank, Shell Canada, Symantec and Verizon.