posted third-quarter results in line with its tempered estimates, as higher costs offset a 74% jump in revenue.
The company, a data-processing provider for financial firms, said Wednesday its earnings fell to $3.84 million, or 18 cents a share, from $4.47 million, or 21 cents a share, a year earlier. The year-ago results benefited from a lower tax rate; earnings assuming a 2005 tax rate were 14 cents a share last year.
Third-quarter revenue surged to $49.2 million from $28.3 million in the year-ago period.
Analysts polled by Thomson First Call had an average estimate for earnings of 18 cents a share and revenue of $49 million.
The results met Open Solutions' Oct. 17 lowered forecast. At the time, the company estimated third-quarter earnings of 17 cents to 19 cents a share, down from a prior forecast of 20 cents to 21 cents. The company said it faced higher-than-expected implementation costs and bonus commissions, as well as greater investments in research and development.
"While we did not achieve all of our goals for the quarter, we saw strong demand for our products as demonstrated by not only total revenue increasing by 74% compared to the third quarter of 2004, which includes a 28% growth in license revenue, but also 60% growth in signed contract value and 29% growth in pro forma EPS over the same period last year," Chairman and CEO Louis Hernandez Jr. said in a statement Wednesday.
For the fourth quarter, Open Solutions expects earnings of 29 cents to 33 cents a share, at or above analysts' mean projection of 29 cents a share. The company anticipates revenue of $50 million to $55 million, bracketing Wall Street's forecast of $53 million.
The company sees full-year earnings of 79 cents to 84 cents and revenue of $184 million to $189 million, in line with previous projections. Analysts, on average, predict earnings of 80 cents a share and revenue of $187 million, according to First Call.
Last year, Open Solutions posted earnings of 19 cents a share for the fourth quarter and 54 cents a share for the full year, adjusted for a normalized tax rate.