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Lawson Software Beats Estimates

Revenue rises 16%.

Updated from 4:38 p.m. EDT

SAN FRANCISCO --

Lawson Software

(LWSN)

beat Wall Street's first-quarter earnings estimates Thursday.

The St. Paul, Minn., software company said it had revenue of $187.4 million, up 16% over the same quarter of the prior year, when revenue was $161.8 million.

Analysts had been expecting a top line of $186.1 million, according to Thomson Financial.

EPS was 3 cents on net income of $5.6 million, vs. a loss of 8 cents a share and $15.8 million in the year-ago period.

Excluding items, EPS was 7 cents. Analysts were expecting EPS of 5 cents.

The business application software developer said second-quarter revenue would range from $200 million to $205 million. Excluding items, EPS is projected to be 6 to 8 cents. Analysts were expecting revenue of $205.6 million and EPS of 8 cents.

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Shares of Lawson were off 42 cents, or 4.1%, to $9.89.

The company said 29% more deals were signed year on year, but the average price per deal dropped by 21%, to $89,000.

The difference was prompted by the high demand for an infrastructure product released in the past year at a lower price point, President and CEO Harry Debes said in an interview. Lawson System Foundation includes several

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middleware components. The product experienced strong customer acceptance and yields high margins, he added.

What appeared to be weakness in the Americas during the quarter was the result of a motivated sales force that succeeded in closing so many deals early, in the prior quarter, Debes said. "Our fourth quarter

2007 ... exceeded expectations by a mile."

The deal pipeline is strong, Debes said, using the M3 Enterprise Management System product line as an example. Sales in the product's pipeline stood at $97 million in June 2007 vs. $10 million in June of 2006, Debes said.

Lawson is staffing up to support growth and has raised its offshore headcount to 15% of full-time employees or their equivalents, many of those at a newer facility in the Philippines, which houses some research, professional services and customer support. The site now employs about 450 people, with hiring there expected to double. A new service center in Lausanne, Switzerland has also been hiring.

Full-year guidance for revenue of $820 million to $830 million and EPS, excluding items, of 30 cents to 34 cents is unchanged.