Jobs Cuts Despite Strong Performance at SPSS

MR software and predictive analytics giant SPSS has announced third quarter revenues up 4% vs Q3 2007 to $74.9m and net income up 25% to $10.5m. However, the firm intends to respond to the global downturn by cutting costs, including a ten per cent staff reduction.

The firm expects fourth quarter revenues of between $73.0m and $78.0m, and $302-$308m for the 2008 fiscal year, but also estimated charges of between $3.5m and $4.5m relating to the cost management and staff reduction initiatives.

Revenues for the nine months ended September 30 totalled $228.8m, up 8% vs last year, and net income was up 19% to $28.2m, with EPS up 27% to $1.47. Operating income remained at 16% of revenue, around 60% of which came from outside the US. Excluding the effects of currency exchange rates, total revenues were up 3% for the 9-month period.

Chairman, CEO and President Jask Noonan says the firm is well-positioned to manage through the current economic downturn. He comments: 'In the midst of these very challenging economic times, we met our revenue and earnings expectations for the third quarter... with our loyal customer base, we were able to offset much of the slowdown in larger, multi-user transactions with an increase in smaller and single-user license sales. In particular, we benefited from the 2008 third quarter release of our upgraded flagship product SPSS Statistics 17.0.'

Executive VP and CFO Raymond Panza explains the decision to cut costs and reduce numbers, actions which between them are expected to save more than $10m: 'Although we anticipated a strengthening U.S. dollar and continuing slowdown in the economy, few expected the extensive changes in the global markets that have occurred over recent months. Consistent with our demonstrated financial discipline, we have initiated actions to ensure continued solid operating margins and profitability, including a global staff reduction of nearly 10% to be completed during the fourth quarter.'

The firm is online at www.spss.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.