Business Objects Reports Soft License Sales

Execs say customers are waiting to buy BusinessObjects 11, which will ship at year's end.
Business Objects SA says its license sales were soft in the third quarter because customers are waiting for a major new app release that's in beta tests. It made the admission while reporting its quarterly earnings.

Business Objects' third-quarter profit was $11 million, or 12 cents per share, compared with a profit of $10.8 million, or 17 cents, a year ago. Revenue for the quarter, ended Sept. 30, was $219.5 million, compared with revenue of $129.1 million a year ago.

License revenue for the third quarter was $105.7 million. The company reported that query, analysis, and reporting products accounted for $96.4 million, or 91%, of all license revenue, with fees for performance-management and analytical-application software totaling $3.7 million, and data-integration products reaching $5.6 million.

Wednesday, Business Objects CEO Bernard Liautaud blamed soft license revenue on a "classic product-transition" phase. His BusinessObjects 11 is due by year's end.

He expects revenue of $230 million to $240 million in the fourth quarter and earnings of 14 to 20 cents per share. For the year, the company expects revenue of $890 million to $900 million and earnings of 42 to 48 cents per share. "We think we're going to be the first independent business-intelligence vendor to reach annual sales of $1 billion," Liautaud said in a recent interview.

Business Objects has been integrating Crystal Decisions' products with its own since it bought Crystal Decisions last December for $1.2 billion. Integration of the two companies, including merging sales forces and eliminating redundant positions, was completed this summer, Liautaud says.

While it now has a common interface for the two product lines, the upcoming BusinessObjects 11 will be the first fully integrated release. BusinessObjects 11 is being beta tested by 50 customers.

Business Objects holds its annual user conference next week in Grapevine, Texas, and customers expect more information about BusinessObjects 11 and product migration.

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