Business Objects preliminary results for the second quarter are "disappointing and below our expectations," Chief Executive Officer John Schwartz said on Thursday. The business intelligence software vendor failed to reach license revenue targets because it is taking longer than anticipated to close some large deals, he said.

Total revenue for the second quarter of 2006 is expected to be approximately $287 to $291 million, with license revenue of approximately $116 to $118 million and services revenue of approximately $171 to $173 million. The company's previous guidance issued on April 26, 2006 estimated total revenue for the second quarter of 2006 between $295 to $300 million.

"Services today account for just over 15 percent of our business," Schwartz said. Although the number of staff working on services remains flat or is declining, the company is improving profitability by focusing on "higher value-add offerings, moving from implementations to a consulting or advisory role," he said. The company appointed a vice president of professional services, former Ernst & Young partner Mark Doll, in January.

Schwartz deferred repeated questions from analysts about the performance of those acquisitions until the release of final figures for the second quarter on July 26, saying only that the integration of FirstLogic has gone smoothly.

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Prashanth Rai