Updated from 5:26 p.m. EDT

BEA Systems ( BEAS) reported second-quarter results Wednesday thatwere largely in line with Wall Street's estimates and announced that it hasnamed its CEO to the post of chairman of the board.

In a post-close conference call, CEO and newly named Chairman AlfredChuang said the third quarter is "off to a great start," with third-quarterrevenue expected to be flat to slightly up sequentially. The fourth quarteris expected to see sequential revenue growth in the mid-single digit percentages.

"We remain cautiously optimistic in an IT environment that remainschallenging," Chuang said.

BEA reported net income of $20.2 million, or 5 cents a share, in thefiscal second quarter, which ended July 31. That compares with net incomeof $24 million, or 6 cents a share, in the same period a year earlier and aprofit of $3.9 million, or 1 cent a share, in the first quarter.

Excluding charges, BEA said it earned $25.9 million, or 6 cents ashare, in the second quarter, compared with pro forma income of $43.9million, or 10 cents a share, a year earlier. Pro forma profits weresequentially flat from the first quarter.

The company said revenue fell 15.6% from a year ago to $225.9 millionand was basically flat sequentially.

BEA's earnings were in line with analysts' estimates gathered byThomson Financial/First Call, while revenue came in just a shade short ofthe consensus expectation of $226.6 million.

License fees fell 27.9% to $124.1 million from $172.2 million in thesame period a year ago and dropped 5.3% from $131.1 million in the firstquarter. The company completed nearly 2,400 transactions, down from 2,500in the first quarter.

After the call, Goldman Sachs analyst Tom Berquist said the quarter offered no surprises. "It was good relative to a lot of the numbers we saw coming through in June," hesaid. "It felt very good."

But Berquist, who has a buy rating on BEA, said what happens to thecompany's stock Thursday will largely depend on the rest of the market. Andwhat happens with the rest of the market will depend on whether companiessubmit certified results to the Securities and Exchange Commission, asrequired by new legal rules. Berquist's firm has done banking business withBEA.

BEA said while third-quarter revenue is expected to be flat to slightlyup sequentially, operating profits and earnings per share are expected tobe similar to second-quarter numbers. Third-quarter license revenue isexpected to be flat to slightly down based on seasonal patterns,particularly in Europe, while service revenue is expected to be upslightly.

Wall Street estimates showed BEA earnings going up a penny in the thirdquarter and two pennies more in the fourth quarter. The consensus estimatepegged third-quarter revenue sequentially flat and fourth-quarter revenueup at $243.3 million.

BEA also announced Chuang, one of the company's co-founders, has beenpromoted to chairman of the board. Chuang succeeds another BEA co-founder,Bill Coleman, who will continue as a board director. Chuang succeededColeman as CEO in October.

BEA also confirmed that its CEO and CFO will certify the company'sresults for the quarter when it files its 10-Q with the Securities andExchange Commission in mid-September, as required by new legal rules.

BEA, which has faced tough competition from IBM ( IBM), devoted a largechunk of its conference call to taking on Big Blue. BEA said it beat IBM indirect competition 210 times in the fiscal second quarter. Chuang indicatedIBM's recently announced acquisition of PricewaterhouseCoopers is notexpected to affect BEA because the consulting firm contributes to less than1% of its overall revenue.

Shares of BEA Systems climbed 61 cents, or 11.8%, to close Wednesday at$5.76. In after-hours trading, shares rose to $5.88.

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