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Cognos' Guidance Disappoints

Late traders focus on a glum near-term outlook.



reported a slight increase in second-quarter earnings Wednesday on a 14% increase in sales, but said third-quarter results would fall short of expectations.

Although Cognos also reiterated sales guidance for the fiscal year, investors appeared to be responding to the third-quarter outlook as they punished shares in recent after-hours trading. Shares of Cognos recently fell to $37.35, down $1.67, or 4.3%, from a close of $39.02.

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The Ottawa, Canada-based business software maker reported net income of $28.7 million, or 31 cents a share, in the second quarter, which ended Aug. 31. That was up slightly from net income of $27.6 million, or 30 cents a share, a year earlier and a penny higher than the consensus estimate gathered by Thomson First Call.

Revenue rose to $212 million from $185.2 million a year earlier, basically in line with analyst estimates of $212.7 million.

License revenue totaled $78.6 million, an increase of 4% from a year earlier.

Cognos expects third-quarter revenue to range from $230 million to $237 million and third-quarter earnings to be 36 cents to 39 cents a share. That was lower than analyst estimates, which last called for Cognos to earn 40 cents a share on $235.4 million in sales in the third quarter.

Cognos reiterated full-year guidance of $915 million to $930 million in sales and earnings of $1.52 to $1.58 a share. Analysts were most recently pegging full-year earnings of $1.56 a share on $927 million in revenue.