The firm posted revenue of $63.4m, down from $76.9m in the same period a year earlier. CEO Tod Nielsen said, We continue to work through execution issues in EMEA and saw a few important deals slip into future quarters. On the up-side, he said ALM revenue was solid and that ALM demand is encouraging.

The firm saw a net loss of $11.2m, an improvement on its net loss of $19m in the year-ago quarter.

Nielsen laid some of the blame for its disappointing sales at the door of its recently formed CodeGear development tools division: CodeGear was sequentially flat, but well below our expectations. We are focused on stabilizing this business and reducing our reliance on CodeGear to achieve ongoing growth and profitability.

However, CodeGear’s performance did impact our second quarter results and will affect our ability to achieve our internal goals for the fiscal year, Nielsen said. As a result, we are reducing our annual overall revenue guidance, but we remain committed to our goal of achieving profitability in the second half of the year.

Our View

Borland, remember, tried to sell the CodeGear division back in February 2006 shortly after Nielsen had become CEO, but could not find a buyer willing to make an offer that it considered fair. In a dramatic U-turn, Nielsen announced in late 2006 that it was making CodeGear an independent subsidiary and no longer seeking a buyer.

When Computer Business Review challenged Nielsen on the about-turn shortly after it was announced – after all it was he who had a year earlier said he wanted to sell CodeGear because Borland is spread too thin across the product portfolio, which has negatively affected our ability to execute – he defended the decision.

Nielsen told us certain prospective bidders had sought to buy CodeGear with debt rather than cash. In that case I’m left carrying the debt, he said. So I said let me run it independently and clean it up myself, give it its own brand that they can add value to.

As CodeGear seems to be at least partly responsible for dragging down Borland’s results and hence its share price (it was down over 11% on Nasdaq in yesterday’s trading), Nielsen will surely wish he had taken whatever offer was on the table for CodeGear when he had the chance. But then, hindsight is a wonderful thing.