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Open Text Reaffirms 2005 Targets

TSC Staff

Open Text (OTEX) surged 9% after the software company posted a solid first quarter and reaffirmed 2005 guidance.

For its quaarter ended Sept. 30, the Waterloo, Ontario, maker of content management software lost $956,000, or 2 cents a share. That reverses the year-ago profit of $3.4 million, or 8 cents a share.

On a so-called adjusted basis, excluding certain costs, latest-quarter earnings were 7 cents a share, down from 12 cents a year earlier but a penny ahead of the Wall Street analyst consensus estimate. Sales rose 94% from a year ago to $85.6 million, driven by a 41% gain in licensing revenue.

For its second quarter ending in December, the company expects to earn 22 cents a share on sales of $103 million. The Thomson First Call estimate calls for a 24-cent profit on sales of $103 million.

"We are seeing traction from customers who want a full ECM suite that includes content management, collaboration and e-mail archiving," said John Shackleton, President of Open Text. "Based on our current visibility into our pipeline, we reaffirm our guidance for the fiscal 2005 year."

The stock rose $1.31 to $16.31 in postclose trading.