Updated from 4:30 p.m. EST Cognos ( COGN) boosted fourth-quarter revenue by 23% and handily beat Wall Street's expectations, the business intelligence software vendor reported after the close Thursday. Cognos stock was recently up $1, or 3.3%, to $31.60 in after-hours trading, after gaining $2.10, or 7%, to $30.60 during Thursday's regular session. Cognos also announced that CEO Ron Zambonini will retire from his position at the end of June. Rob Ashe, currently president and chief operating officer of Cognos, will become CEO effective June 23, and will be nominated for election to the Cognos board of directors at the next shareholders meeting. Zambonini will be named board chair, succeeding the current chair, James Tory, who will assume the position of lead director. The Ottawa-based company earned a profit of $46.1 million, or 50 cents a share, according to generally accepted accounting principles, compared to $29.6 million, or 33 cents a share, in the year-ago quarter. Revenue for the quarter was a record $202.1 million, compared to $163.7 million in 2003. Pro forma earnings were 39 cents a share, excluding a favorable change in the tax rate and a one-time cost. Analysts polled by Thomson First Call had projected a pro forma profit of 35 cents on sales of $193.67 for the February quarter. Total license revenue in the quarter was $93.5 million, a year-over-year increase of 18%. "We are extremely pleased with the results for the fourth quarter and the full year," Zambonini said in a prepared statement. "It was rock solid by every objective measure." Looking ahead to the fiscal first quarter, management said investors should expect revenue to range from $169 million to $171 million, and diluted earnings per share of 19 cents or 20 cents. The projections were in line with Wall Street's expectations.
In an interview, CFO Tom Manley said the overall economic climate is improving slightly, but is being held back by uncertainty over global events. He noted that deal sizes "have been increasing" as long as he's been with the firm and this year was no exception. The company signed 37 contracts greater than $1 million in fiscal 2003, an all-time high for Cognos and up from 21 last year. Revenue for the full fiscal year 2004 was $683.1 million, an increase of 24 percent from 2003. On a GAAP basis, net income for fiscal 2004 was $100.9 million, and diluted earnings per share were $1.10 compared to last year's net income of $73.1 million, or $0.81 per share. Excluding the favorable change in tax rate and the one-time cost, pro forma diluted earnings per share in fiscal 2004 were 99 cents.