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An old adage for screenwriters is to leave the audience wanting more. The idea is that if a good story gets padded too much the audience will start to find it dull.

Which brings me to BEA Systems, Inc., (BEAS) which announced certain financial results for the fiscal first quarter ended April 30, 2007:

• Total revenues of $345.8 million were up 7% from last year’s first quarter. So far so good.
• Services revenue of $231.2 million was up 21% from a year ago. Better still.
• License fees of $114.6 million were down 13% from a year ago, which is bad because license fees are one of the important indicators of future revenue for software firms.
• However, deferred revenues of $434.7 million were up 19% from a year ago, and these are another such growth indicator.

And that was about as far as the report went, since BEA is one of the many tech companies that can’t figure out how much it actually makes. Or, as it reports:

BEA is not providing full GAAP or non-GAAP financials for the first quarter due to the previously announced voluntary internal review of BEA’s historical stock option grants, which has been conducted by the Audit Committee of BEA’s Board of Directors with the assistance of independent legal counsel. The outcome of that review will require us to change our accounting treatment of certain stock option grants, which will have a material adverse effect on our results of operations for certain historic periods and may have a material adverse effect on our results of operations for the first quarter and certain subsequent periods.

And there is nothing quite so thrilling, of course, as a “world leader in enterprise and communications infrastructure software” (their words, not mine) being unable to calculate or communicate its own profits. Still, in this case it appears that by failing to provide information they may indeed have left investors just hungry enough for more. The shares are higher in after-hours trading.

When I previewed the earnings report, I said their guidance for next quarter needs to beat the estimate of $0.14, but investors will probably be disappointed by anything short of a buyout. However, the conference call only updated revenue guidance:

We anticipate that revenues for the second quarter of our fiscal 2008 will be within a range of $353 million to $367 million, and that the license component of revenue will comprise 32% to 35% of total revenue.

(Excerpt from full BEAS conference call transcript)

That is about in line with expectations. And that, apparently, is good enough for now.

Source: BEA Systems Leaves Investors Hungry For More

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