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Open Text beats analyst estimates with 20% profit, revenue jump

The Open Text building in Waterloo, Ont. Revenue at the company also improved, rising 20.2 per cent to $321.5-million (U.S.).

Kevin Van Paassen/The Globe and Mail

Open Text Corp. beat analyst estimates last quarter as the Canadian global software company's profit rose to $47.4-million (U.S.) and its revenue increased by 20.2 per cent over the year-earlier period.

Profit at the Waterloo, Ont.-based company amounted to 81 cents a diluted share in the three-month period ended Dec. 31.

That was up from 64 cents or $37.1-million a year earlier, the company reported after markets closed Wednesday.

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Open Text, which sells software used by major companies around the world to manage their electronic documents, says its revenue for the fiscal second quarter was $321.5-million, up from $267.5-million a year earlier.

Its adjusted earnings amounted to $1.39 a share, up from $1.22 in the second quarter of fiscal 2011.

Analysts were looking for adjusted earnings of $1.23 a share and about $312-million of revenue for the three-month period, according to estimates compiled by Thomson Reuters.

Mark Barrenechea, 46, who joined the company and became its president and chief executive officer in January, said he was happy to be based out of Waterloo.

"I look forward to working with the company's employees, customers and investors to lead Open Text to the next level of success," Mr. Barrenechea said in a statement.

Open Text is the leading supplier in its market niche, although not nearly as large as CA Technologies with a market cap of $12.5-billion or Oracle Corp., which is worth about $141.8-billion.

It has specialized in software products that large organizations use to create, manage and archive electronic documents such as e-mails. It has recently acquired several companies involved in e-learning and adapted its product line to reflect the rising importance of social media.

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Mr. Barrenechea has held senior positions at several major tech companies, including president and CEO of Silicon Graphics Inc. from May, 2009, until December, 2011, when his appointment as John Shackleton's successor was announced.

He was previously president and CEO of Rackable Systems and, in that capacity, led its acquisition of Silicon Graphics. He has also been chief technology officer for Computer Associates (now called CA Technologies) and senior vice-president for applications development at Oracle Corp., both large U.S. software companies.

With a file from David Paddon in Toronto

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