J.D. Edwards outshines competition

SAP may own the high-end enterprise resource planning market. But J.D. Edwards owns the middle market.

The Denver-based company, which makes software that manages such business functions as financial accounting or manufacturing material flow for medium-size companies and divisions of large companies, announced yesterday that it posted another successful quarter.

J.D. Edwards' reported profits of $18.1 million or 16 cents per share for the third quarter ended July 31, up 150 percent from the like quarter the previous year, when it reported profits of $7.2 million or 7 cents a share. Profits for the company's nine-month period were equally impressive, rising 156 percent from the previous year to $36.8 million or 34 cents per share, up from $14.4 million or 15 cents per share.

Revenues for the third quarter were up 47 percent to $239.6 million, from $162.5 million reported for last year's like period. For the nine-month period, revenue was $626.8 million, 45 percent higher than the previous year's $431.2 million posted for the same period.

Licensing revenue for the third quarter was up 66 percent to $98.1 million, and up 61 percent to $242.5 million for the comparable nine-month period. Services revenues for the quarter rose 37 percent to $141.5 million, up from the previous period's $384.3 million.

J.D. Edwards' upside comes as its competitors have seen harder times. Most of its top competition posted dismal quarterly financial results earlier this week. Analysts say the enterprise software industry is feeling the pinch from too many players chasing too few deals, and from an increase in competition that has resulted from big players like SAP, Oracle, and PeopleSoft targeting smaller companies in an effort to generate new business.