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Veritas Rebounds

Software vendor pleased with quarterly results despite 'challenging' IT environment

Veritas Software Corp. (Nasdaq: VRTS) today reported revenue and net income growth and boasted improved margins, increased cash, and the confidence of meeting its longtime goal of hitting $2 billion in revenue this year (see Veritas Revenues Up in Q3).

CEO Gary Bloom says he's happy about the results, even though the IT spending environment continues to be "challenging." Further, he notes that government spending, which was a big contributor to Veritas's figures last year at this time, didn't show up that much this quarter. And he says big deals of more than $1 million were down, dragging along sales of SAN management software, which was down 13 percent sequentially.

All that said, the figures were greeted positively by analysts on the conference call today. Revenues of $497 million were up 2 percent sequentially and 11 percent year over year; net income of $96.2 million or $0.22 per diluted share was up from $91 million or $0.21 cents per diluted share last quarter.

Gross margin was 84 percent; headcount was 7,400, up 327 people before the impact of acquisitions; and cash and short-term investments amount to $2.5 billion.

The report contrasts with that of last quarter, which disappointed Veritas execs (see Veritas Rides Earnings See-Saw). Bloom and others claim the company is expanding in its newly revamped data protection and backup lines and that competition is having a "neutral effect on Veritas sales all around," even though others, such as EMC Corp. (NYSE: EMC) were thought to be chipping away at Veritas last quarter (see Veritas Plots Its Backup Plan).

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