TORONTO (Reuters) - Open Text Corp's
quarterly profit rose sharply on strong revenue growth and cost
controls, the Canadian business software firm said Wednesday.
Net income rose to $51.5 million in the fourth quarter,
ended June 30, from $19.5 million a year earlier. That equated
to earnings per share of 89 cents, compared with analyst
forecasts for 86 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 18 percent to $240 million from $203.4
million, with licenses bringing in $68.5 million of that.
The Waterloo, Ontario-based company has the second largest
share of the market for enterprise content management (ECM)
after IBM Corp and partners with tech infrastructure
vendors SAP AG, Microsoft Corp and Oracle
A recent free upgrade to Microsoft's Sharepoint platform
could hit Open Text's market share, RBC Capital Markets analyst
Mike Abramsky said before the results release, downgrading the
stock to "neutral" from "outperform." He also cited a dearth of
acquisition targets in the note.
Open Text said that, while Microsoft may have been a threat
in the past, a more symbiotic relationship had developed.
"To be honest, we see Sharepoint has expanded our market,"
the firm's president and CEO, John Shackleton, said on a
conference call after the results.
"For customers who need DoD (U.S. Department of Defense)
certification for records management ... digital asset
management as well as our interfaces to SAP and Oracle are
really enhancing that relationship. We're seeing Sharepoint
helping us," he said.
He said the firm had completed the integration of recent
acquisitions, including Web media company Vignette in 2009 and
tech consultancy Burntsand this year, and was on the lookout
for more buyouts. The firm was not considering a dividend
payout in the foreseeable future, he said.
Open Text shares closed up 36 Canadian cents at C$38.41 in
Toronto Wednesday, but were well off their year high of
C$51.92. The results were released after markets closed.
The global ECM market was worth $3.3 billion in 2008,
according to research firm Gartner, which forecast the market
will grow around 9.5 percent annually through 2013.
($1 = $1.03 Canadian)
(Reporting by Alastair Sharp; editing by Rob Wilson and Andre