December 20, 2007 / 2:03 PM / in 10 years

Cognos net profit nearly doubles

OTTAWA (Reuters) - Cognos Inc CSN.TOCOGN.O, the business software provider being bought by IBM IBM.N for $5 billion, said on Thursday its third-quarter net profit nearly doubled as sales increased 16 percent.

Cognos, which makes business intelligence software, said it earned $31 million, or 37 cents per share, in the three months ended November 30, up from a profit of $16.5 million, or 18 cents per share, in the same period a year earlier.

Adjusted profit was $43.1 million, or 51 cents a share, compared with $43.1 million, or 48 cents a share, in the year-earlier quarter. That excludes the writedown of deferred revenue, amortization of acquisition-related intangible assets, stock-based compensation costs and restructuring charges.

Revenue rose to $288.2 million from $247.8 million. Sales excluding a writedown of deferred revenue in connection with the company’s Applix acquisition were $290 million.

Analysts were expecting the company to earn 51 cents a share before one-time items on revenue of $277.7 million, according to Reuters Estimates.

The results were “essentially in line with our expectations and are unlikely to change IBM’s offer for Cognos in any material manner,” BMO Capital Markets analyst David Wright wrote in a note to clients.

License revenue rose 16 percent to $108.9 million from $94 million in the third quarter of last year.

The company said it signed 18 contracts larger than $1 million in the quarter, up from 11 such contracts a year ago.

Cognos also said that it has been issued an advance ruling certificate from Canada’s Commissioner of Competition on the proposed IBM deal, which constitutes compliance with pre-merger notification requirements. Cognos shareholders will vote on the deal on January 14.

The company’s shares edged 5 Canadian cents higher to C$57.48 on the Toronto Stock Exchange on Thursday morning.

($1=$1 Canadian)

Reporting by Susan Taylor and Wojtek Dabrowski; Editing by Peter Galloway

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