Guidance Trips Business Objects

Business Objects

(BOBJ)

beat Wall Street's fourth-quarter earnings and revenue expectations on Wednesday, but couldn't extend that promise to the first quarter now under way, guiding results below current estimates.

The company's stock took a hit in after-hours trading and was recently down $1.74, or 4%, to $41.58 on Instinet.

The business software company said profit for the quarter ended Dec. 31 rose to $34.9 million, or 37 cents a share, from $21.3 million, or 24 cents a share, a year earlier.

Excluding items, the company earned $40 million, or 42 cents a share, in the latest quarter, edging Thomson First Call's analyst estimate by 2 cents.

Fourth-quarter revenue rose 14% to $305 million, surpassing consensus estimates from Thomson First Call of $292.6 million.

License revenue generated from deals over $1 million grew 50% during the full-year 2005 while license revenue from transactions between $200,000 and $1 million grew 25%.

"By any measure, our fourth quarter and 2005 results were tremendous," John Schwartz, CEO of Business Objects, said in a statement. "The robust license growth and profitability achieved in the quarter emphasizes the success of Business Objects XI in the market."

But for the first quarter, Business Objects offered a mixed bag: the company said it will post revenue of $278 million to $283 million, above First Call's estimate of $273.4 million. But it said earnings before items should come in between 27 cents and 30 cents a share, below the consensus estimate of 31 cents a share.

For the full year, the company expects revenue will range from $1.21 billion to $1.23 billion and earnings before items will run between $1.45 and $1.55 a share. First Call was expecting revenue of $1.17 billion and earnings of $1.49 a share.