Business Objects' (BOBJ) second-quarter earnings fell 66%, but the company's results were better than it and analysts had feared.Moreover, the company predicted that third-quarter revenue and sales could exceed Wall Street's estimates. Investors were exuberant at the news. In recent trading after-hours trading, shares of Business Objects were up $3.18, or 15.3%, to $24. In the just-completed period, the business software maker earned $7.9 million, or 8 cents a share. That was down from the second quarter last year, when the company earned $23.1 million, or 25 cents a share. Revenue rose 12% year over year to $294.5 million, thanks to a 25% jump in service revenue. But the company's gross and operating margins declined, thanks to rising costs. Administrative expenses and research and development spending both rose by more than 30% from the second quarter last year, while marketing costs rose more than 17%. Excluding amortization and stock options expenses, Business Objects would have earned $29.1 million, or 31 cents a share, down from $60 million, or 63 cents a share, a year ago. Still, the company's results were better than the company's guidance and Street estimates. Analysts polled by Thomson First Call were expecting the company to earn 28 cents a share, excluding amortization and stock options costs, on sales of $290.5 million. Earlier this month, the company
For the third quarter, Business Objects expects to earn 15 cents to 18 cents a share, or 32 cents to 35 cents a share sans items, on sales ranging from $293 million to $298 million. On the midpoints, that forecast tops the consensus view going into the report. The Street had previously predicted that the company would earn 32 cents a share, excluding charges, on $293.1 million in sales in current period. In the third quarter last year, Business Objects earned $19.6 million, or 21 cents a share, on revenue of $261.4 million. The company's stock closed regular trading on Wednesday up 83 cents, or 4.2%, to $20.82.