Autonomy expects to top forecasts

Autonomy expects to top forecasts
By Philip Stafford

Published: October 3 2008 18:56 | Last updated: October 3 2008 18:57

Autonomy , the search software company, bucked the gloomy prognosis for IT groups as burgeoning demand for its compliance-related software meant third-quarter earnings would be “significantly” ahead of market estimates.

The group expects to report record third-quarter results, with both revenue and earnings per share either ahead of consensus estimates or above the top end of the range. Organic growth was also accelerating, Autonomy said.

The group has felt the benefit of a US legal decision at the start of the year ruling that lawyers had just 99 days to decide what electronic data could be examined for evidence in a lawsuit.

Autonomy’s products help businesses archive and retrieve materials such as e-mails and phone calls. Its software discovered inconsistencies in the trading records of Jerome Kerviel, the rogue trader at SocGen.

Mike Lynch, chief executive, told the Financial Times that the group still had a high backlog of work “that gives us a much higher level of confidence about 2009”. He also said Autonomy had experienced “waves of interest” from insurers in the wake of AIG’s rescue to struggling hedge funds.

“Our take is that the statement is pointing us towards $125m-$128m (£70m-£72m) of revenue and 17 cents of EPS,” said David Toms, an analyst at Numis Securities.

However, the shares fell 39½p to 890½p on continued concerns that the market for business software had slowed recently amid the wider banking global crisis.

The stock has dropped 20 per cent since re-entering the FTSE 100 for the first time in seven years in mid-September.
Copyright The Financial Times Limited 2008