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Updated from Dec. 9.

BEA Systems

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reiterated fourth-quarter guidance late Tuesday. The company also projected its revenue would expand about 10% to 12% annually in the next few years, keeping pace with the growth of its addressable market.

Speaking at the San Jose, Calif.-based software maker's analyst day, CFO Bill Klein said the company is still targeting revenue of $260 million to $270 million in the fourth quarter, which ends in January. Application-server vendor BEA previously also projected earnings would come in at 8 cents to 9 cents a share.

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The consensus estimate gathered by Thomson First Call calls for earnings of 9 cents a share on revenue of $267.1 million in the fourth quarter.

About 20 minutes into the trading day Wednesday, BEA shares were up 19 cents, or 1.7%, to $11.67. Friedman Billings upgraded the stock to market perform from underperform.

Klein also offered a snapshot of how the company expects its financials to look in three years, as it branches out into the integration and security spaces with a platform approach that also features a portal product and development tools.

BEA expects its gross margins in 2005 to remain unchanged from their current level, at about 78% to 79%. But Klein said operating expenses should decline to 51% to 52% of revenue from 58% to 59% targeted in fiscal year 2004, a drop driven by the revenue growth. Similarly, the company's operating profit should climb to 27% to 28% of revenue in 2006 from 19% to 20% in fiscal 2004, while net profit should jump to 19% to 20% of revenue from 13% to 14% in 2004.

Earlier in the day, Charlie Ill, executive vice president of worldwide sales, said BEA's business with the federal government -- a weak spot last quarter -- should show some turnaround in the current quarter as a result of some unspecified changes made by BEA. The company's federal business dropped 25% sequentially last quarter, although the company indicated some sales weren't lost but merely postponed, and should show up within the next few quarters.