Investors were expecting a particularly strong third quarter from enterprise software developer BEA Systems
In the third quarter, revenues increased 19% to $347.7 million, and the company posted a 12% increase in software license fees to $136.4 million. This is important, since these revenues lead to ongoing maintenance and service fees.
However, there was no report on BEA's net earnings, because of its internal investigation of its prior option grants. There should be an announcement on the status of this investigation sometime in December.
BEA develops advanced software systems known as middleware, which help companies operate e-commerce sites and other Web applications. The company also develops corporate portals, which help companies organize internal operations.
However, these categories are fairly mature, and each has major competitors, such as IBM
A big catalyst for SOA is the surge in mergers and acquisitions activity. As companies combine, they may have different IT architectures, but SOA can help these firms better meld their operations.
Unfortunately, it is taking time for BEA to get traction in this market. Fourth-quarter guidance is light, with a forecast for revenues of $378 million to $392 million. This should not be too surprising, since it's not unusual for companies to move slowly when adopting a new technology.
That said, it's certainly a big issue for BEA. And until things pick up, the stock price should languish.
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