Business Objects issues Q3 profit warning

Source: Business Objects

Business Objects (NASDAQ:BOBJ) (Paris:BOB), the world's leading provider of business intelligence (BI) solutions, today announced preliminary results for the third quarter of fiscal 2007.

In a separate release issued today, the company announced that a tender offer agreement was signed with SAP AG, and that SAP will launch a direct cash tender offer for all outstanding shares, bonds and warrants of Business Objects at €42 (approximately $59.64 at current exchange rates) per share.

Total revenue for the third quarter of 2007 is expected to be approximately $366 to $370 million, with license revenue of approximately $137 to $139 million; and services revenue of approximately $229 to $231 million. U.S. GAAP diluted earnings per share for the third quarter of 2007 are expected to be $0.04 to $0.06. Non-GAAP diluted earnings per share for the third quarter of 2007 are expected to be $0.36 to $0.39.

"We continued to generate double-digit year-over-year total revenue growth in all geographies, however, our license revenue was below expectations, which in turn caused a shortfall in earnings," said John Schwarz, chief executive officer of Business Objects. "We are disappointed with our results in the third quarter, but we are encouraged that demand for our solutions remains strong. We are confident that we have the best business intelligence solution and the strongest channel to reach the large and growing market for business analytics."

The revised third quarter expected results for Non-GAAP diluted earnings per share exclude a charge of approximately $7 million for the final settlement of previously disclosed litigation with Decision Warehouse, and approximately $21 million of amortization of intangibles, $13 million of Stock Based Compensation Expense, and $1.4 million of restructuring and in process R & D expenses from acquisitions.

Although not reflected in these preliminary results, the jury award in the ongoing trial with Informatica Corporation has now been reduced to approximately $12 million. The company previously accrued approximately $25 million as a loss contingency relating to the Informatica litigation and is re-evaluating this reserve in light of the ongoing developments in the case.

The estimated third quarter results set forth above do not include any costs or other charges related to the proposed acquisition of Business Objects by SAP AG.

The company currently anticipates releasing its financial results for the third quarter of 2007 on October 24, 2007.

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