After the close of regular trading Wednesday, the maker of Internet software development tools reported fiscal third-quarter net income of $40.2 million, or 20 cents a share, excluding goodwill write-downs and expenses from Rational's recently acquired Catapulse unit.
Analysts polled by First Call had predicted a profit of 18 cents a share on revenue of $204 million.
Including all charges, Rational earned $26.5 million, or 13 cents a share.
Third-quarter revenue increased 47 percent year-over-year to $215.5 million. The company saw strong growth in all parts of the world, said Paul Levy, chairman and co-founder.
Analysts generally expected the company to slightly exceed their published estimates. "Rational Software should continue to benefit from increasing demand for high-quality and fast software deployment cycles required into today's e-business environment," wrote Sarah Mattson, analyst with Dain Rauscher Wessels, which has a "strong buy, aggressive" rating on Rational.
Rational hadn't given any reason to worry about earnings estimates, SG Cowen Securities analyst Rehan Syed said in a research note released ahead of the third-quarter report.
"Management was particularly confident going into their quiet period, and our sources suggest (they) followed through with a strong close to the quarter," Syed wrote. "We believe the strong execution prowess of this company would have sailed past some of IT spending disruption evident in smaller companies in this space."