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Weak dollar trims Verint profits

A Verint video analytics console

A Verint video analytics console Credit: Verint Systems Inc.

A sharp decline in the earnings of Verint Systems Inc. earlier this week stemmed in part from a weak dollar, especially against the Israeli shekel and the Canadian dollar.
Verint, based in Melville, provides video and voice analytics software.

Verint reported a 58 percent decline in quarterly net income, for the months August through October, after the market closed Wednesday. It had $199.3 million revenue compared to $186.6 million in the same quarter last year; and it reported a $5.7 million profit compared to $13.5 million in the year-ago quarter.

The biggest culprit was higher spending on research and development — specifically, an increase in hiring and a weaker dollar that affected salary costs for researchers in Canada and Israel.

Verint sells its Actionable Intelligence analytics to the National Security Agency, the World Trade Center's transportation hub, and more than 10,000 organizations in more than 150 countries -- including roughly 85 percent of Fortune 100 companies.

The software captures and dissects complex streams of voice, video, and text, giving users clues about security threats, customer complaints, retail logistics and other insights.

The company said its operating expenses increased to $111 million, from $97.3 million in the prior-year quarter, mostly due to a $9.1 million increase in research and development costs. Those costs, in turn, were "primarily attributable to an increase in employee headcount as well as an increase due to the impact of the weakening U.S. dollar against the Israeli shekel and Canadian dollar on research and development wages in our Israeli and Canadian research and development facilities," Verint said in a statement.

As of Oct. 31, Verint said, it employed about 3,100 including part-time employees and certain contractors, compared to about 2,700 on the same day in 2010. Verint has a market capitalization of $1 billion, and reports $26.2 million profit for the past four quarters on sales of $744.8 million.

Verint is a majority-owned subsidiary of Comverse Technology Inc., a public company based in Manhattan.

Late Friday morning, shares of Verint were up $0.35 to $27.47.
Photo shows a Verint video analytics console.

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