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BMC beats 1Q forecasts

Strong growth in client-server revenue during the first quarter helped BMC Software Inc. top analyst forecasts by two cents.

In fiscal first quarter results released after market close Thursday, the maker of systems management software reported net income of $105.3 million, or 42 cents a share, excluding merger-related charges and amortization. First Call's survey of 25 analysts predicted earnings of 40 cents a share for the quarter ended June 30.

First quarter rose 43 percent, to $400.7 million from $279.3 million in the year-ago period. License revenues gained 47 percent year-over-year, with North American license business increasing 63 percent. Maintenance and service revenue went up 36 percent.

Mainframe revenue gained 42 percent, while client-server systems business rose 63 percent

BMC closed its purchase of New Dimension Software Ltd. in the first quarter. Including acquisition-related items, BMC posted net income of $16.4 million, or 7 cents a share.

During the first quarter, BMC reorganized its business into five units. Cost of revenues fell to 9.3 percent of total revenue, from 11.2 percent a year earlier. General and administrative costs rose over the same period to 8.6 percent of revenue, from 7.4 percent.

The company also launched a new worldwide marketing campaign. Sales and marketing consumed 35 percent of revenue, compared to 32.2 percent in the first quarter of fiscal 1999.

Research and development expenses remained relatively flat at 14.4 percent of revenue.

Shares of BMC fell 3 1/4 to 48 3/8 in regular trading ahead of the earnings report. Of 28 analysts polled by Zack's Investment Research, 14 maintain the equivalent of "moderate buy" ratings on BMC, 11 recommend the stock as a "strong buy", and two have "hold" ratings>