Updated from 11:18 AM EST

SAN FRANCISCO - Shares of Sybase ( SY) got a boost Thursday after the company's fourth-quarter profit jumped with the help of a $27 million tax credit.

The Dublin, Calif. maker of infrastructure software reported fourth-quarter revenue of $295.2 million, up 15% from a top line of $256.5 million last year. Analysts polled by Thomson Financial were expecting $286.6 million.

The stock was up $1.18, or 4.6%, to $26.20 in recent trading.

Net income was up 178% to $73.5 million, from $26.4 million a year ago. EPS was 81 cents vs. 28 cents last year. The company received a $27 million credit to tax expense relating to the reversal of valuation allowances on certain U.S. tax assets.

Excluding items, EPS was 61 cents. Analysts were looking for 56 cents a share.

For the first quarter of 2008, Sybase projected revenue of $240 million to $250 million and EPS, less items, of 30 cents to 35 cents. Analysts were looking for $246.3 million and 33 cents a share.

For the full fiscal year, the company said it would earn $1.85 to $1.90 a share, excluding items, on a top line of $1.075 billion to $1.09 billion. Analysts were projecting EPS of $1.84 and revenue of $1.082 billion.

The company bought back $75.3 million of stock during the quarter, above its $50 million target, in response to the push by activist hedge fund Sandell Asset Management, which has said it will nominate a slate of candidates to Sybase's board.

Chairman and CEO John Chen said on the conference call Thursday that the company has been unable to comment on Sandell's move while it was in its quiet period. "Our board ... is actively engaged in the company's strategy" and is committed to acting in the interests of the company and all shareholders, he added.

Management expects to repurchase $50 million in shares in the current quarter.

Operating margin was 28% for the quarter and 22% for the year, Chen said. Cash flow from operations was $83.5 million for the final quarter and $254 million for 2007, up 18% year over year.

The mobile middleware business grew 22% during the quarter, taking in $33.5 million in license revenue. Infrastructure software was up 8% to $79.4 million. And services grew 4% to $143.5 million.

The Sybase 365 messaging business grew to $38.8 million. Sybase acquired the business during the fourth quarter of the prior year, preventing comparable comparisons. That business, now profitable, has already seen growth in messaging volume, particularly in North America, from existing customers and the addition of many new clients, Chen said. Margin growth in the messaging business is expected to be strong, from 12% to 15%.

The company may raise new license fees "selectively," but is reluctant to do so on existing products in the current economic climate, Chen said, adding new products will be priced "aggressively."

And Sybase has a full slate of new products for 2008. During the current quarter, the company will bring out a database product for grid computing clusters.

In May, Sybase will release a risk analytics platform for the financial services sector. This will add streaming data to Sybase's IQ Anywhere analytics server that will allow financial institutions to capture real-time trades, Chen said in an interview.

And in the second half of 2008, the company will launch a banking product that will target the high-growth mobile commerce market, Chen said. The application will enable mobile banking transactions.

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