Keynote swings to a profit, sees 1st-qtr income

By siliconindia   |   Wednesday, 29 October 2003, 08:00 Hrs
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NEW YORK: Keynote Systems Inc., which provides services to test and manage e-commerce systems, on Monday posted a quarterly profit versus a year-earlier loss even as revenue slid, because last year's results were hit by a big asset impairment charge.

Keynote also said it expects to report a profit in the first quarter and do more acquisitions in the future.

The San Mateo, California-based company said net income for its fiscal fourth quarter ended Sept. 30 was $652,000, or 3 cents a share, compared with a loss of $53.9 million, or $1.93 a share, a year earlier.

Last year's results were hurt by a charge to write down the company's headquarters facility to its fair value.

Keynote said revenue fell 2 percent to $9.5 million, as its traditional performance measurement business was hurt by a technology spending slowdown.

Meanwhile, it is gaining business helping companies to improve their applications.

"People are naturally quite interested, in a tough economy, to be able to spend money on activities that help to improve their performance," Umang Gupta, chairman and CEO of Keynote, told Reuters.

Gupta also said it will post a profit of 1 cent a share during the quarter ending Dec. 31, up from a loss of 8 cents a share last year.

The consensus estimate of four analysts polled by Reuters Research, a unit of Reuters Group Plc., was a loss of 1 cent a share.

Keynote also sees revenue of $9.3 million to $9.7 million.

During the quarter, Keynote generated cash flow from operations of $2.2 million, compared with $519,000, a year ago.

"We've done seven acquisitions in the last three years and virtually every one has proven to be a moneymaker for us," said Gupta. "We expect to do more acquisitions with the cash that we have in the future."

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