Borland Software's chief executive has re-committed his company to fourth-quarter profitability, despite moving deeper into debt on increased sales.

Borland saw its net losses increase 6.6 per cent to hit $19m, or $0.25 per share, while net revenue increased 15 per cent to $76.9m during its second quarter ended June 30. Borland's revenue beat the company's own expectations for between $73m and $75m - numbers that had been revised up from $69m.

Chief executive Tod Nielsen told investors Wednesday profitability in the fourth quarter remained his goal, as Borland executes a set of complex maneuvers.

Borland is in the midst of spinning out its integrated development environment (IDE) business - which has already been set up as a business within Borland - while digesting testing and performance management vendor Segue as part of a restructuring.

Restructuring will see Borland cut its 1,350 headcount to 1,025 by the end of the year, as Borland spins out tools and also closes offices in certain markets. "As you can tell, there are a lot of balls in the air," Nielsen told Wall Street.

The changes are designed to position Borland for application "lifecycle management" sales, focused on "business optimization," regulation and governance. Nielson appeared reluctant to say which of Borland's products were top sellers during the quarter, explaining customers are looking at the whole suite.

Turning to the competition, Nielson said Borland has an advantage over long-time rivals Rational and Microsoft because they are too focused on their own software runtime environments. He expects an existing partnership with Mercury Interactive - in the process of being bought by Hewlett Packard - to continue despite the fact the duo will compete on application performance and IT governance.®

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