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Veritas Sees Profits Slip

Storage software giant posts Q1 profit but sees slower earnings growth than last year

Blaming an uncertain political environment and a prolonged economic downturn, storage software giant Veritas Software Corp. (Nasdaq: VRTS) said today that its first-quarter 2003 earnings had slipped slightly compared with the same quarter last year.

Veritas posted net income of $43 million, or 10 cents a share, for the quarter. That's compared with earnings of $44 million, or 11 cents a share, a year ago. Excluding charges related to items including acquisitions, Veritas would have posted a profit of 17 cents a share, compared with a 16 cent profit excluding items last year.

In January, Veritas said it expected to post a profit of 13 cents a share for the first quarter, before charges. Analysts polled by Thomson First Call had expected the company to post earnings of 14 cents a share (see Veritas Posts Q4 Loss on Charge).

Veritas said it saw a 6 percent hike in its revenues over the year-ago quarter, to $394 million. While this was well above the companys guidance of $370 million, some observers question whether Veritas had intentionally set the bar a little low.

"I think people are pleased with the revenue number," says Punk Ziegel & Co. analyst Steve Berg. "But you have to wonder if they were giving you a weak number so they can beat it, or if they actually saw some weakness in the market." Another possibility, he adds, is that Veritas's new CFO, Ed Gillis, is playing it safe during his first months on the job (see Veritas Appoints CFO).

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