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Business Objects Profit Lower, in Line with Revision

Software maker Business Objects, which is being acquired by Germany's SAP for 4.8 billion euros ($6.84 billion), posted lower quarterly profit on Wednesday, in line with a revision issued two weeks ago, and it suspended its financial guidance.

"Due to the combination of the actual third quarter results being less than previous guidance and the potential impact of the pending transaction on the fourth quarter results, investors should no longer rely upon the guidance statements....issued on July 25, 2007," the statement said.

Business Objects said uncertainty over the impact of the pending deal with SAP on customer buying behavior, its impact on Business Objects' expenses and uncertainty on the timing of the closing of the offer, lessened fourth-quarter predictibility.

Earlier this month, the same day German software giant SAP said it had agreed to buy the smaller Franco-American company, Business Objects warned that its third-quarter non-GAAP profit would range from 36 cents to 39 cents per share, below analysts' average estimate of 51 cents, according to Reuters Estimates.

It reported non-GAAP earnings of 39 cents a share in the third quarter on Wednesday, down from 41 cents a share in last year's third quarter.

The company, whose business-intelligence software helps companies mine mountains of data to detect market trends, blamed lower-than-expected license revenue and the dilutive impact of recent acquisitions, including around $1 million in net restructuring costs.

Revenue rose 19 percent to $369 million in the quarter, with licence revenue up 6 percent to $139 million.

"While we continued to generate double-digit year-over-year total revenue growth in all geographies, the third quarter licence revenues were below our expectations, primarily due to deal deferrals in certain sectors, and to distractions relating to M&A activity," said CEO John Schwartz in the statement.