Financial Accounting Blog

Sunday, February 08, 2004 discusses how the acquisition of another company can negatively affect the bottom line. Business Objects did not provide net income figures excluding the acquired firm, Crystal Decisions.
On the surface, Business Objects first-quarter earnings fell well below Wall Street estimates. But it wasn't clear if analysts had correctly accounted for the effect of the acquisition. Revenue in the firm's December quarter was a record $184.2 million, compared to $126.2 million a year ago. But net income dropped to a loss of $8.6 million from a profit of $12.8 million, or 20 cents a share, in 2002. The quarter's results include 20 days of revenue and expenses contributed by Crystal Decisions, as well as acquisition costs totaling $43.5 million.