CORRECTION

The Journal of Commerce erroneously reported on its Web site last week that Descartes Systems Group reported a profit in the fourth quarter thanks to a tax benefit. Below is a corrected version of the story. The Journal of Commerce regrets the error.

Descartes Operating Profit Surges 30 Percent
Software as a service proves profitable in difficult market
Thomas L. Gallagher

Descartes Systems Group posted a $15.7 million net profit in the logistics software company's fiscal fourth quarter, a slight decline from the year before, but the company's operating profit grew 30 percent from the fourth quarter a year ago.

The operating profit reached $2.6 million in the three months ending Jan. 31, 2009, up from $2 million last year.

After a deferred tax recovery of $13.1 million in the quarter, Descartes saw its net profit fall 12 percent short of the $17.9 million it earned in last year's fourth quarter. But the earnings marked the third straight quarter of improving profits, after gains of $1.1 million in the first quarter, $1.4 million in the second and $2.3 million in the third.

In the first quarter of this year, Descartes acquired privately-held Scancode Systems in an all-cash transaction. Scancode is a developer and integrator of advanced logistics software and a primary source for carrier-compliant less-than-truckload and parcel shipping software and warehouse functionality. Net of working capital received, Descartes paid approximately $6.6 million and incurred some transaction expenses.