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Quest Beats Estimates

The software company posted a decline in profits in the first quarter.

SAN FRANCISCO - Quest Software (QSFT) posted lower earnings in the first quarter but beat estimates.

Revenue in the first quarter grew 15% at the Aliso Viejo, Calif. company to $172.8 million, from $149.8 million for the same quarter of 2007. Analysts were expecting revenue of $165.2 million, according to Thomson Reuters.

The company has changed the way it recognizes revenue since the first quarter of 2007. Adjusting for the current revenue-recognition model, revenue would have been $136.8 million in the year-ago period.

Net income fell 10.7% to $13.3, or 13 cents a share, from $14.9 million, or 14 cents a share, in the year-ago period.

Excluding items, the operating margin was 13.5%, compared to 22.4% a year ago. Sales and marketing expense grew 21% and research and development expenses jumped 35% year over year.

Excluding special items, EPS was 21 cents. Analysts were looking for 19 cents.

In after-hours trading the stock was up 87 cents, or 6.29%, to $14.70.

The company reiterated guidance for full-year revenue of $705 million to $720 million.

The company's software products work with database software from

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