) to buy from hold.
The company posted 22 cents third quarter earnings per share and said it would acquire Adaytum, a maker of financial planning software.
Analyst Nathan Schneiderman says he regards the acquisition news very positively; he say it establishes immediate credibility for Cognos in the financial application space. Schneiderman says he expects considerable synergies, and thinks the purchase also will give Cognos additional margin of safety to manage or beat top-line and bottom-line estimates for fiscal 2004 (Feb.).
Schneiderman thinks the third quarter was a solid one, matching the consensus revenue estimate and beating consensus earnings per share expectations on cost controls. He sees 77 cents fiscal 2003 earnings per share on $545 million in revenue, and upped the 83 cents fiscal 2004 earnings per share estimate to 93 cents. Schneiderman also raised the $600 million revenue estimate to $660 million, including Adaytum, and hiked the $23 target to $28.