RSA Reports 'Disappointing' First Quarter

Net income rose 12 percent, and revenue increased 5 percent over the comparable quarter a year ago for the identity and access management vendor.

RSA earned $7.2 million during the quarter on revenue of $75.6 million, according to the Bedford, Mass., company. Earnings per share remained flat, at 10 cents a share, for the first quarter of 2004 and 2005.

RSA's slower than anticipated growth in both the U.S and Europe was to blame for the less-than-stellar first quarter results, said Art Coviello, president and CEO.

"We are very confident in our ability to improve our performance," said Coviello. "[But] we did experience slower than expected uptake rates across all of our software products."

The lack of income generated by the licensing cycle of a large number of RSA's popular four-year tokens purchased in the 2001-2002 timeframe also tugged on the bottom line, said Coviello.

RSA, which launched a revamped channel program this week, sold about 77 percent of its flagship SecurID authentication products through resellers during the first quarter of 2005. That's the same percentage of SecurID products sold through the channel during the first quarter of 2004, according to RSA.

The vendor added 622 new customers during the quarter. Technology, financial services, professional services and manufacturing sectors generated the most revenue for RSA during the quarter, the company said.

RSA issued second quarter 2005 guidance for revenue in the range of $76 million to $80 million.