BEA Meets Wall Street Expectations

BEA, based here, reported net earnings per share of 6 cents, meeting consensus estimates of First Call analysts. Last year for the same time period, BEA lost 23 cents per share.

Net income for the quarter was $24.7 million, a significant gain on the net loss of $91 million for the same time period last year. Gross profit for Q3 2003 was $176.5 million, according to company reports.

Total revenues for the quarter were $234 million, with license fees comprising $126.1 million and services fees comprising $108 million of that total.

Pro forma operating income for the quarter was $40.4 million, a 14 percent increase over Q2 2003 and a 31 percent increase over the same time last year. BEA currently has $1.1 billion in cash, and cash flow from operations was $45 million.

On a conference call, BEA founder, CEO and President Alfred Chuang said BEA continued to close large deals in the third quarter despite the persistently challenging economic climate. BEA landed 18 deals above $1 million in Q3, an increase over the 12 deals over $1 million it closed in Q2.

In Q3 2003, BEA also made a strong competitive showing against IBM, its chief rival, Chuang said. He said BEA beat IBM in 325 deals where the two companies competed head to head, up 54 percent from 210 deals landed by BEA similarly in last quarter.

Chuang added that in 223 of those deals won against IBM, BEA "was chosen even though IBM was the incumbent."

Additionally, in 56 of the 325 accounts landed by BEA against IBM, BEA software replaced IBM technology, a 75 percent increase over 32 replacements last quarter, Chuang said.

IBM continues to maintain that it is gaining market share on BEA in the application-server business. The vendor also expects to make significant inroads with its new Express line of middleware, launched this week, targeted at the SMB market, IBM said.

An IBM spokeswoman called BEA's claims "illogical," and that IBM in fact had 500 wins against BEA in the third quarter. She added that by talking about wins against IBM, BEA is trying to "distract people from the fact that IBM is growing at their expense."

Chuang said BEA also continues to innovate and provide customers with value, and expects its new Liquid Data integration software--released in Q3--to bring in revenue for the company in Q4.