SPSS reports stellar Q4
Shares of SPSS Inc. (Nasdaq: SPSS) are rising following news after the close on Monday that the provider of predictive analytics technology and services reported fourth-quarter results that beat Wall Street’s expectations.
The Chicago-based company reported that revenue for the quarter ended Dec. 31, 2007, increased 12% to $79.6 million from $71.1 million a year earlier. Eight analysts polled by Thomson Financial were expecting revenues of $75.3 million.
Net income was $10 million, or $0.50 per share, compared with $2 million, or $0.10 per share, during the final three months of 2006. Analysts had forecasted earnings of $0.38 per share.
“The fourth quarter was a good end to a good year,” said CEO Jack Noonan in a statement. “Revenue growth in the quarter was powered by new sales of our data mining tools, which augmented another solid increase in new licenses of our statistical products.”
SPSS licenses its software to organizations seeking to optimize interactions with their customers. New license revenues were $42.1 million during the fourth-quarter, up 18% from $35.8 million in the fourth quarter of 2006.
“I think they had a nice finish to a nice year,” said Peter Goldmacher, an analyst with investment bank Cowen & Co., in a phone interview.
However, Goldmacher is maintaining his “underperform” rating on the stock.
“One of the things I worry about is that this is a small company that has had three years of growth by fixing broken pieces of its business,” he said. “I don’t think there is margin upside by making improvements to their business.”
“They have a lot of work ahead of them,” Goldmacher concluded. “It’s going to be very hard to continue to improve the business.”
At close, shares of SPSS Inc. (SPSS) had added $5.70, or 18%, to $37.20. The 52-week high of $47.87 was reached on Aug. 1, 2007. The 52-week low of $29.01 was established on Feb. 7.
