German vendor of data center automation software Beta Systems Software AG, based in Berlin, has reported third quarter net profit down 9% at the equivalent of $600,000 on revenues up 6.3% at $11.4m. This was caused by an exceptional, one-off expenditure of $830,000, relating to a settlement made during the period. Nine-month net losses were down 25%, at the equivalent of $180,000, on revenues up 18.2% at $29.5m. Net earnings per share rose 37% to $0.17 in the quarter, while for the nine months, the loss per share was down 25%, to $0.05. The company said revenue growth in the third quarter had been the result primarily of an increase in service contracts, since revenues from software licenses had remained pretty flat. Revenues from version upgrades of its eponymous software packages meanwhile fell 75% during the quarter, the bulk of customers having already carried out their upgrades before it began. On the other hand, the company pointed out, this downturn was amply compensated by an 80% increase in revenues from CPU upgrades. With regard to the various geographical regions in which the company operates, Beta said its targets had been achieved in Germany and the US, but downturns in the economies in Eastern Europe, Russia and South America had negatively impacted its business in those areas. As a result of these factors, the company said it has revised downward its forecast for the growth in its revenues for the year as a whole, by some 4%-5%, also expecting a negative impact on the pre-tax profit for the year. The poorer performance also led Beta to rethink its previously announced plans to acquire Canadian software house QMaster Software Solutions. Instead it has negotiated a deal whereby it can resell QMaster’s Unix- and NT-based process and document management software. Beta has therefore guaranteed access to the technologies that interested it in the Calgary-based software vendor’s product portfolio, while avoiding the diluting effect on its capital of the aforementioned acquisition.
