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Veritas Vrooms: Page 2 of 3

“The revenue number was fantastic,” says Punk Ziegel & Co. analyst Steve Berg.

The services side of Veritas’s business did particularly well during the quarter, at $152 million, a 24 percent increase over the year ago quarter, and representing 37 percent of total revenue. About 80 percent of the company’s services revenues was related to high renewal rates, Veritas CFO Edwin Gillis said on the conference call.

Veritas also beat its own estimates on how much cash it would generate over the quarter. While the company’s cash reserve remained the same as last quarter at $2.4 billion, it managed to generate about $122 million during its second quarter, outshining the $70 million to $90 million it expected to bring in.

For the current quarter, which ends on September 30, Veritas says it expects earnings of between 13 cents and 15 cents a share on a GAAP basis, including acquisition-related charges of 2 cents a share. The company also expects its revenues for the quarter to range from $420 million to $430 million. That number includes revenues attributable to Precise Software, which it acquired at the end of June (see Veritas Picks Up Precise).

Factored into the guidance is also anticipated seasonal weakness in the European economy, Bloom said. “Clearly, whenever you get into the summer months in Europe, you get concerned about that seasonal weakness that goes on,” he said. “The softness is a little softer than I’d like to see it... We remain concerned.”