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Rational Software

(RATL)

said its pro forma fourth-quarter EPS came in ahead of estimates, but the company lowered its first-quarter and 2003 guidance.

The company reported fourth-quarter pro forma net income of $19.5 million, or 10 cents a share, down from $45.9 million, or 22 cents a share, in the year-ago quarter. Analysts polled by Thomson Financial/First Call had been expecting the company to earn 9 cents a share.

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Revenue for the quarter was $180.1 million, down 25% from $241.68 million last year, but in line with analyst estimates of $180.18 million.

The software maker said that its enterprise business remained strong despite the downturn, and its focus shifted to cost management during the economic uncertainty.

The company also lowered its first-quarter and 2003 full-year outlook, saying it now sees full-year revenue growth in the range of 10% to 20% instead of 15% to 25%, and the company now expects EPS of 50 to 60 cents for the year. Analysts are currently expecting to see 51 cents.

For the first quarter, the company forecast EPS of 5 cents to 6 cents on revenue of $160 million to $170 million, below the consensus estimate of 8 cents a share on revenue of $177.15 million.