Revenue Climbs at Mercury Interactive

The company swings to a third-quarter profit.
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Updated from 9:15 a.m. EDT

Mercury Interactive

(MERQ)

swung to a third-quarter profit as sales climbed more than 31% from a year ago.

Under generally accepted accounting principles, Mountain View, Calif.-based Mercury Interactive posted net income of $19 million, or 21 cents a share, in the third quarter, which ended Sept. 30. That reversed a loss of $6.7 million, or 8 cents a share, in the same period a year earlier.

Excluding charges, Mercury Interactive said it earned $24.4 million, or 27 cents a share, in the third quarter, compared with $21.3 million, or 23 cents a share, a year earlier. Revenue rose 31.1% to $165.4 million from $126.1 million a year earlier.

Wall Street analysts expected Mercury to earn pro forma net income of 24 cents a share on $164.2 million in revenue in the third quarter, according to Thomson First Call.

Deferred revenue -- a key measure of future sales -- increased $19.3 million from the second quarter to $346.6 million.

Mercury, which makes software to test application performance, expects fourth-quarter revenue to range from $185 million to $195 million, fourth-quarter non-GAAP earnings to range from 32 cents to 38 cents a share, and GAAP earnings to range from 28 cents to 34 cents. That guidance straddled analyst estimates calling for fourth-quarter non-GAAP earnings of 35 cents a share on $188 million in sales.

Mercury expects deferred revenue to increase between $40 million and $50 million in the fourth quarter.

Mercury shares recently climbed $1.19, or 3.1%, to $39.50 Thursday.