ISS Meets 1Q Expectations

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Internet Security Systems Tuesday reported pro forma first-quarter earnings that met Wall Street expectations.

The software vendor, based here, reported pro forma net income of $4.7 million on revenue of $58.4 million for its first quarter, excluding non-cash acquisition charges.

Earnings per share of 10 cents met First Call/Thomson Financial consensus estimates.

Including charges, ISS reported net income of $3.3 million, or 7 cents per share. That compares with net income of $6.5 million on $61.2 million in revenue for the same quarter a year ago.

"ISS completed a solid quarter, despite the tough economic conditions," Tom Noonan, ISS president and CEO, said in a conference call.

The company improved its sales operations, further segmenting direct and indirect sales, he said. The segmentation, together with compensation programs, reduced channel conflict, he said.

Noonan said ISS focused its direct-sales force on large enterprise accounts, driving broader midsize and small-business accounts through its channel programs.

The company revised its guidance for the rest of the year to the low end of its previous revenue target of $260 million to $270 million.

"While the current global environment indicates strong long-term interest in security solutions, this guidance assumes a conservative overall IT spending environment during the first half of 2002," the company said in a statement.

Shares of ISS closed Tuesday at $22.03, down $1.12.

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