INDUSTRY

Cognos Incorporated announced financial results for the third quarter of fiscal year 2006, ended November 30, 2005. Revenue for the third quarter was $212.3 million compared with revenue of $210.4 million in the third quarter of last fiscal year. License revenue was $75.5 million compared with $91.6 million for the same period of last fiscal year. Net income in the quarter was $28.3 million, compared with $34.5 million in the third quarter of last fiscal year, resulting in diluted earnings per share of $0.31 in the third quarter of fiscal year 2006, versus $0.37 in the same period last fiscal year. Revenue for the first nine months of this fiscal year was $624.4 million, compared with $569.2 million for the same period last fiscal year. Net income for the nine-month period was $80.8 million or $0.87 per diluted share, compared with $82.3 million or $0.89 per diluted share for the same period of last fiscal year. "As we reported on December 1, we are disappointed with our performance in the quarter," said Rob Ashe, Cognos president and chief executive officer. "It was a quarter of transition for us as we introduced our new BI platform, Cognos 8, and this transition had an impact on our performance. In addition, we were only able to close seven contracts greater than $1 million, compared to 15 in the third quarter last year. "Despite this performance, I remain very confident in our business. Cognos 8 delivered $14.4 million in license revenue in its first quarter in the market, and Cognos Planning license revenue grew by more than 20 percent. These products are the pillars of our strategy, and their performance gives me confidence in our opportunity going forward," Ashe continued. Cognos' balance sheet remains strong. Operating cash flow for the quarter was $8.8 million, and the company repurchased $24.4 million of its shares in the third quarter. Cognos exited the quarter with $483.3 million in cash, cash equivalents, and short-term investments. Business Outlook Management offers the following outlook for the fourth quarter of fiscal year 2006: * Revenue is expected to be in the range of $230 million to $240 million; * Diluted earnings per share are expected to be in the range of $0.34 to $0.39. Management offers the following outlook for the full fiscal year 2006, ending February 28, 2006: * Revenue is expected to be in the range of $854 million to $864 million; * Diluted earnings per share are expected to be in the range of $1.21 to $1.26.