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FileNet Soars on Strong Earnings Report

Technology: The Costa Mesa software maker beats analysts' predictions by 5 cents a share.

October 13, 2000|From Dow Jones Newswires

FileNet Corp., a Costa Mesa developer of document management software, posted third-quarter earnings Thursday that surpassed analysts' expectations.

It also said it has named a new president.

The bullish financial report helped spare the company from the day's carnage on Wall Street.

FileNet's stock surged more than 21%, making it the biggest percentage gainer Thursday among Orange County stocks. The shares closed at $19.13, up $3.38, in Nasdaq trading.

The company said it earned $10.2 million, or 28 cents a share, up from $4.6 million, or 14 cents a share, a year earlier. Analysts had estimated earnings of 23 cents a share for the recent quarter, according to a First Call survey. Revenue rose nearly 16% to $99.1 million.

The company also said Ron Ercanbrack has taken on the duties of president from Lee Roberts, who remains chief executive. Ercanbrack was executive vice president of sales and marketing.

FileNet said it was bolstered by strong sales of its new Web software offerings and cost controls.

In an effort to boost lagging sales of its work-flow software, which manages documents electronically, the company has spent the past year focusing on software that makes corporate information Internet ready--what it calls Web content management.

In the third quarter, FileNet's Web-related software sales totaled $29.2 million, up 39% from the second quarter. The gain offset a 27% decline in revenue from the company's older software business, which totaled $20.8 million.

Web-related business accounted for 58% of the quarter's software revenue and more than half of total revenue, Roberts said.

"We've really transitioned the company very successfully to being a major player in the Web," he said.

Roberts said FileNet now expects its Web software revenue to reach $95 million for the year, more than triple revenue in 1999. In the first three quarters, revenue totaled $63.6 million.

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