First Albany Downgrades Cognos

Analyst Mark Murphy says the software company faces progressively difficult license revenue growth comparisons for the next three quarters

First Albany downgrades software company Cognos Inc. (COGN ) to neutral.

Analyst Mark Murphy says preannounced first-quarter figures fall below consensus estimates of $208 million revenue and 25 cents earnings per share.

He says on a conference call, management indicated license revenues will be approximately $70 million, vs. $81 million consensus, representing 6% year-on-year growth. He notes this is the first time Cognos has missed revenue guidance in years, and the first time earnings growth has flattened out in years.

Murphy is moving forward and notes the company faces progressively more difficult license revenue growth comparisons for next three quarters. He maintains $1.61 fiscal 2006 (ending February) earnings per share and $1.84 fiscal 2007 estimates. He remains optimistic on the long-term outlook for Cognos.

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