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Cognos (COGN) shares are up slightly in after-hours trading following the company’s earnings report for the fiscal third quarter ended November 30. Revenue for the quarter of $247.8 million topped Street expectations of $241.1 million; non-GAAP profits of 48 cents a share beat the consensus Street forecast of 43 cents.

For the fourth quarter, the company sees revenue of $270 million to $280 million, with GAAP EPS of 54-60 cents a share and non-GAAP EPS of 61-67 cents; the Street has been expecting $276.4 million and 63 cents non-GAAP. For the full year, the company sees revenue of $965 million to $975 million, GAAP profits of $1.14-$1.20 a share and non-GAAP of $1.64 to $1.70. The Street consensus is revenue of $964 million and non-GAAP profits of $1.61 a share.

In an interview with Barron’s Tech Trader Daily blog this afternoon, CEO Rob Ashe noted that the company had “very strong license growth” in the quarter, up 24%. He noted that Cognos 8, the new version of the company’s flagship business intelligence software, generated $60 million in revenue, up from $44 million one quarter earlier. He said the company has built a “solid pipeline” and that “market demand is quite good” for Cognos software.

Ashe said he expects overall IT spending in 2007 to show “low single digit growth,” consistent with 2006, with business intelligence software taking up a disproportionate share. “BI continues to gain traction and move up the priority list,” he says.

Ashe says growth in the quarter was balanced across geographies and vertical sectors. He says the company had 11 deals in the quarter worth over $1 million, versus 7 such deals a year earlier and 10 in the previous quarter. Ashe added that average order size is going up, “as the solution has become more strategic.”

Ashe believes there is still still huge growth left for business intelligence software; he says only about 20% of the potential corporate users now have access to business intelligence software.

In after hours trading, Cognos is up 5 cents at $41.89.

COGN 1-yr chart:

cogn chart

Source: Cognos Earnings Beat Street; Guidance In-Line