BEA grows profit, revenue in Q4

BEA Systems Inc. grew both revenue and profits in its fiscal fourth quarter, citing strong sales of its WebLogic server software.

Net income for the period ending Jan. 31 was $39.3 million, or $0.09 earnings per share, up from $35.0 million, or $0.08 per share, in the same quarter a year earlier, the company said in a statement Thursday.

Revenue for the quarter was a record $278.1 million, up from $249.3 million a year earlier. Revenue from software licenses, seen by analysts as a good indicator of company health, grew to $143.1 million, from $134.6 million a year earlier, BEA said.

On a pro forma basis, net income was $42.8 million, or $0.10 per share, up from $37.3 million, or $0.09 per share, a year earlier. The pro forma results exclude expenses related to acquisitions, gains and losses on investments, and other one-time items.

Financial analysts had been expecting pro forma earnings of $0.09 per share on revenue of $267.3 million, according to Thomson First Call.

“We had our strongest quarter ever,” said Alfred Chuang, BEA’s founder, chairman and CEO, in a conference call to discuss the results.

BEA signed 26 deals worth more than $1 million during the quarter, up from 21 deals of that value a year earlier, he said. It also added 340 new customers, including American Airlines Inc. and AT&T Wireless Services Inc., Chuang said.

BEA’s competitors in the middleware market include IBM Corp., Oracle Corp., Microsoft Corp., and open source company The JBoss Group LLC.

WebLogic Platform 8.1, which was released last year and integrates BEA’s application server, portal server, integration server into a single package along with a development environment, is gaining traction among customers, according to Chuang. In the fourth quarter, 11 percent of BEA’s license revenue came from customers who bought the entire platform, as opposed to individual components, he said.

“Our strategy is to converge three distinct product markets into a platform market by offering competitive total cost of ownership and ease of use advantages. We built the suite so that customers can buy the platform by adopting one product at a time,” Chuang said.

BEA hopes to grow its business further by offering product packages specifically for midsize companies that will include fewer features and be priced lower than its enterprise offerings, Chuang said in an interview later Thursday. The product packages will start to be rolled out this quarter and sold exclusively through value-added distributors, he said.

For the full year, BEA grew its revenue by 8 percent from the year earlier to hit $1.01 billion, passing the billion dollar mark for the first time. Net income for the year came in at $118.7 million, up 41 percent, while earnings per share was $0.28, compared to $0.20 a year earlier, the company said.

“We’re entering (the first quarter) with strong momentum and we intend to aggressively grow our sales capacity and distribution channels to service the increased number of customer projects,” Chuang said.

He predicted first-quarter revenue between $260 million and $270 million, which would be about level with analysts’ current expectations and represent double-digit year-over-year growth for the company, he said.

“We feel the environment is steadily improving, based on what we are hearing from our customers and our success in closing Q4 deals. In Q4, in addition to normal seasonality, we clearly saw WebLogic 8.1 gaining significant traction among customers,” Chuang said.

While 70 percent of BEA’s customers are running its application server on an Oracle database, the company saw a spike in the use of Microsoft’s SQL Server database, Chuang said. Customers are also turning increasingly toward clusters of Intel Corp.-based servers to run its software, he said.

BEA plans to offer versions of its products for Intel’s forthcoming Xeon processor with 64-bit extensions, Chuang said, which is designed to compete with Advanced Micro Devices Inc.’s 64-bit Opteron chip, which BEA already supports.

BEA’s shares (BEAS) on the Nasdaq closed at $12.93, down $0.02. In trading after hours, the stock climbed to $13.12.