Shares of

BEA Systems

( BEAS) have fought their way back to near six-month highs on continued talk of a buyout and bullish expectations for a key business segment.

Clearing the way for the move higher has been the anticipation that the company is nearing the day when it will be current in its financial reporting. The San Jose, Calif.-based company expects to file overdue earnings reports for several quarters as early as this month and "get back on file," according to Eric Stahl, BEA's senior director of investor relations.

"One near-term catalyst for the company will be the resolution of its options investigation, which we expect in the July quarter," said Adam Holt, an analyst with JPMorgan.

After putting that issue behind it, the company will accelerate buyback of its shares, he added. BEA recently authorized the repurchase of an additional $500 million in shares.

Shares of BEA were recently off 13 cents, or 1%, to $13.25, but the stock is up more than 25% from a recent 52-week low set six weeks ago.

BEA is also seen as a player in the burgeoning service-oriented architecture (SOA) market, which is serving businesses with a more interoperable and multisourced software platform.

The percentage of overall license revenue accounted for by BEA's AquaLogic platform, launched in 2005, jumped to 25% in its most recent quarter, from 10% for the same quarter of the prior year, Stahl said.

But not everyone is convinced in future upside. Sanford C. Bernstein analyst Charles Di Bona claims bullish views on the software vendor are misguided, and "the positive sentiment on the stock merely reflects wishful thinking."

Any growth in BEA's service-oriented architecture software AquaLogic, which it acquired in 2005, comes at the expense of licensing of its WebLogic and Tuxedo products, he stated in a Monday research note. Sanford C. Bernstein makes a market in BEA.

With AquaLogic's strength and recent takeover speculation, "we are concerned that investors are relying too heavily on expectations of significant upside that ... exhibit significant risk," Di Bona wrote.

"We believe that the relatively tepid organic growth of the company is beginning to show through," Di Bona stated, noting that license growth was down 13.4% for the first quarter of 2008.

BEA's license revenue for the most recent quarter and guidance for the second quarter were both disappointing, Stahl acknowledged at an investor conference Monday.

The "most viable bull scenario" is a leveraged buyout, according to Di Bona. "While such a transaction is unlikely" at current prices, it would be more feasible "if BEA's shares trade below $12," he wrote. His target price on the stock is $11.

In a filing on Monday, BEA's largest institutional shareholder, Naples, Fla.-based Private Capital Management, reported it had increased its stake to 41.7 million shares, or 10.6% of outstanding shares, from 9.5% at the end of March.

As a major investor in Knight Ridder in 2005, Private Capital Management chief investment officer Bruce Sherman pressured the newspaper chain into a sale.

Private Capital Management did not return a phone call requesting comment.

He emphasized the growth of the company's maintenance revenue, which he said is not highly correlated to license growth. Maintenance offerings include the company's premium service, Mission Critical Support, which provides enterprises dedicated support engineers and guaranteed uptime. Another lucrative product, Guardian, is available to clients only through maintenance contracts.

But AquaLogic "is on a very steep growth projection," Stahl said. At the suggestion that significant market adoption of SOA may still be years off, he said BEA believes a platform shift is already under way.

"SOA is for real. Not only BEA believes this. But


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are reorienting their companies around this major architectural shift," Stahl said.

Meanwhile, BEA's business process management software, Fuego, is BEA's fastest-growing product, Stahl said.