Sybase Wraps Up Profitable Year - InformationWeek

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1/27/2004
04:06 PM
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Sybase Wraps Up Profitable Year

The database and integration software vendor went from red to black in 2003, but still sees slide in software license sales.

It was a profitable year for Sybase Inc., a company with a long history of rocky financial performance. The database and integration software vendor reported today that it closed 2003 with net income of $37.7 million, or 38 cents per share, for the quarter ended Dec. 31, compared with a $9.8 million loss for the same period in 2002.

But a long slide in Sybase's software license sales, a key indicator of a company's growth, continued in the quarter, dropping 5% to $81.6 million. A 4% increase in service-related revenue to $129.1 million pushed total revenue to $210.7 million in the quarter, essentially flat with total revenue from one year ago.

The drop in license fees and increase in service revenue are due to an increased emphasis on "solution sales," says Thomas Volk, executive VP of Sybase's infrastructure platform group. Sybase also said some customers who had not purchased software from Sybase in recent years did so during the quarter, signaling a renewed interest in strategic IT investments.

Sales of mobile and wireless products were particularly strong, up 19% year-over-year. "That's really the high-growth area for the company," Volk says. Sales of Linux-related products also were strong.

For the year ended Dec. 31, Sybase reported net income of $87.3 million, or 89 cents per share, compared with a $94.7 million net loss in fiscal 2002. License revenue was down 15% for the year to $274.8 million, while total revenue was down 6% to $778.1 million.

Revenue for the current quarter is expected to be in the range of $190 million to $195 million, up 5% to 8% over last year, with earnings in the range of 20 cents to 24 cents per share. For the year, Sybase expects revenue growth of 4% to 6%.

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