Against the backdrop of a stagnant economy, a 72% increase in profit for Group 1 Software ( GSOF) sure stands out.

Group 1, a small outfit that provides an array of direct marketing services and solutions to names like American Express ( AXP) and Wal-Mart ( WMT), posted fourth-quarter profit of $3.5 million, or 22 cents a share, better than the year-ago profit of $2 million, or 14 cents a share. Shares leapt 11.6% to $21.87 on the news in morning trading.

The lone analyst covering the Maryland-based company expected it to earn 15 cents a share, which was slightly below what the company said it expected to earn for the quarter. The company said revenue hit $29.2 million in the fourth quarter, which not only topped the year-ago quarter by 21% but also beat its own internal estimates.

For the full year, the company earned $8.7 million, up 99% from the $4.4 million it earned a year ago, on $104.3 million in revenue, up 17% from fiscal year 2002. Group 1 Software earned 59 cents a share for fiscal 2003, better than the 55 cents a share expected by the one analyst and also the 32 cents a share from the previous year.

"We are obviously pleased with the very strong results we saw for the quarter and full year in both of our operating segments," said Chief Executive Bob Bowen, in a press release on Monday morning. "Our traditional and new products contributed to our growth both in the fourth quarter and over the full year."

Indeed, the company credited strong performance in enterprise solutions software and customer communications management software for the jump in profit. All told, license fee revenue for the company jumped 53% on the year in the fourth quarter, with the customer communications product growing 70%.

The company also has plans to expand its product lines and services with the acquisition of Sagent Tecnnology for $17 million in cash and debt, which was announced on April 16. Under its current plan, Sagent's technology will be offered as a stand-alone product, with some feature integrated into Group 1's current suite of products.

Not counting the impact of the merger, which still must be approved by common stockholders, Group 1 said it was on track to deliver double-digit percentage growth in the coming fiscal year.

"Excluding the potential impact of the pending Sagent acquisition, our guidance for the fiscal year ending March 31, 2004 remains unchanged," said Chief Financial Officer Mark Funston. "The company projects revenue growth in the range of 10% to 12% over fiscal 2003 and net earnings growth in the range of 24% to 28%. Additionally, we project that Sagent acquisition will contribute approximately $30 million in revenue the first year and will be accretive within 12 months."