Analytics software maker Cognos Inc. warned Thursday of grim financial results in its just-ended third quarter, a situation Chief Executive Officer Rob Ashe attributed to a rocky launch of Cognos' overhauled BI (business intelligence) software.
"I am extremely disappointed with our performance this quarter," Ashe said in a written statement. "Our forecasting and execution against large sales opportunities were poor, and our management of the transition to our new BI platform, Cognos 8, proved challenging."
Cognos, with headquarters in Ottawa, Ontario, said its revenue for the quarter ended Nov. 30 was in the US$209 million to $212 million range. The consensus estimate of analysts polled by Thomson First Call was for revenue of $233 million. Cognos expects per-share earnings of $0.28 to $0.31, down from the $0.38 analysts forecast.
Four Wall Street firms downgraded Cognos' shares on Friday, and financial analysts let loose a flurry of notes discussing what went wrong for Cognos. The general view was that Cognos' problems lie with the company's management, not its software.
"Our view regarding this miss is simple: Cognos' new product, Cognos 8, was not in the market until the last 12 days of the quarter -- and that simply wasn't enough time," JMP Securities LLC analyst Pat Walravens wrote. "We have seen Cognos 8, however, and it compares very favorably to the other offerings available from other business intelligence vendors."
SG Cowen & Co. LLC's analysts believe Cognos is having trouble persuading a customer base that has already spent millions on Cognos' ReportNet software to pay even more to upgrade to Cognos 8, an extensive application that includes ReportNet as well as several other Cognos products. Still, Cognos has a "massive and generally satisfied" installed base and overall demand for BI software remains strong. SG Cowen said.
Cognos 8, which began shipping last month, pulls all of Cognos' previously separate analytics and reporting tools together into one package with a unified user interface. The application brings together Cognos software including ReportNet, PowerPlay, Metrics Manager and DecisionStream, among others, and includes portal, query, dashboarding and event management functionality.
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