Business software company Open Text Corp. (TSX:OTC) more than doubled its profits in the first quarter despite the impact of the U.S. government shutdown.
The Waterloo, Ont.-based technology firm reported that net income grew to $30.6 million, or 52 cents per share, an increase of about 57 per cent from $19.4 million, or 33 cents per share, a year earlier.
Revenue declined slightly to $324.5 million from $326.2 million.
Despite the improved profit, chief executive Mark Barrenechea noted that the company faced slower growth because of political strife in the United States near the end of the quarter, which wrapped up on Sept. 30.
The federal government shutdown began on Oct. 1 and lasted until Oct. 16, though fears of its impact rippled through the weeks beforehand.
"The destruction was widespread," Barrenechea told analysts on a conference call.
"When the government... talks of financial default and then ultimately shuts down, it pauses purchasing in many countries, in many industries, and in many governments due to large-scale uncertainty."
Open Text sells software and data management technology used by companies to manage their electronic documents.
The company managed to improve its overall results with operating cash flow rising 29.4 per cent and adjusted operating margins that increased 30.6 per cent in the quarter, Barrenechea said.
Licence revenue for the quarter was essentially flat at $55.3 million.
Customer support revenue grew nearly four per cent to $168.4 million.
Open Text has been rapidly expanding over the past few years with the acquisition of several companies involved in e-learning, which has contributed the growth of its shares, which have risen 42 per cent since the start of the year.
The company's stock lifted $2.31 to close at $79.25 on the Toronto Stock Exchange before it reported its latest financial results.
Last year, Barrenechea became the company's president and CEO after holding senior positions at several major tech companies, including Silicon Graphics Inc.
The next software product line in development at Open Text has been given the tentative name Red Oxygen and is currently in a beta testing stage with more than 500 customers, Barrenechea said.
Red Oxygen is an integrated software suite, a gathering of various programs and applications, which together provide various data analysis options and safe access to other related email and document software.
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