BMC Upbeat On Remedy Business Unit During 4Q Earnings

The figures compare with net earnings of $12.1 million in the third quarter of 2003.

According to BMC President and CEO Bob Beuchamp, the loss is primarily due to charges for acquisitions and restructuring.

Excluding those special charges, the company said it earned $43 million, or $0.19 per share, compared to earnings of $34.6 million, or $0.15 per share, for the third quarter of 2003.

"BMC Software's strong third-quarter performance is a testament to our strategic focus and solid execution," he said during the company's quarterly earnings call. "From a financial perspective, we met or exceeded all our goals for the quarter."

Sponsored post

Specifically, Beuchamp said the Remedy business unit, which agreed last month to acquire assets of Magic Solutions from Network Associates for approximately $47 million in cash, continues to generate strong revenue growth and high operating margins. Total revenue for Remedy in the third quarter of 2004 were $69.8 million, excluding $12.0 million of amortization of intangibles.

Houston-based BMC's deferred license revenue grew 23 percent in the third quarter of 2004, compared with the same quarter last year, Beuchamp said. Given this record $73.7 million net increase, the company will introduce a new metric called "license bookings" that reflects the amount of license contracts signed during a given quarter. This new metric includes both the amount that goes to the income statement and the amount that goes to the deferred license revenue account on the balance sheet.

Looking forward, BMC expects modest revenue growth in the fourth quarter of 2004. Beuchamp said the company anticipates fourth-quarter earnings to be in the range of 21 cents to 25 cents per share. These projections do not include an estimated 5 cents per share of amortization on acquired technology and intangibles, Beuchamp said.