Cognos Posts Big 2Q GainsCognos Posts Big 2Q Gains

The business-intelligence industry may be consolidating, but that just seems to fuel the growth of the leading vendors. Cognos Inc. on Thursday reported hefty sales and earnings gains for its second quarter.

Cognos reported net income of $18.2 million, or 20 cents per share, for the quarter ended Aug. 31, up 32% from the same period a year ago. Sales were up 23% year over year to $158.2 million, fueled by a 13% increase in product-license revenue to $62.2 million, as well as 29% and 30% growth, respectively, in product-support and services revenue.

There's been a flurry of acquisitions among business-intelligence vendors this year--Business Objects SA, Cognos' chief competitor, said Thursday that its pending acquisition of Crystal Decisions Inc. had cleared the waiting period required by antitrust laws. Customers want to buy more business-intelligence products from a smaller number of strategic suppliers, a shift that Rob Ashe, Cognos' president and chief operating officer, said has accelerated in the last six to nine months. "I think we're positioned very well," he said.

Cognos said sales of its analytical applications grew 33% in the quarter. The majority of those sales are financial-planning applications Cognos acquired when it bought Adaytum Inc. earlier this year. The company also inked 50 deals for its new ReportNet reporting software, although Ashe wouldn't provide a dollar figure for those sales. Cognos expects sales of ReportNet to reach $10 million in the current quarter, according to a goal set by CEO Ron Zambonini. The vendor reported signing 88 contracts worth more than $200,000 each in the quarter.

For the current quarter, Cognos expects revenue in the range of $170 million to $172 million, with net income of 24 or 25 cents per share.