Software vendor posts $9.8 million loss, but CEO predicts revenue and profits will grow in 2003.
Sybase Inc. on Tuesday reported a loss of $9.8 million, or 10 cents per share, on sales of $210.6 million for its fourth quarter ended Dec. 31, 2002. But sales of integration and wireless software were up during the quarter and John Chen, president and CEO, predicted revenue and profit growth in 2003.
Sybase's quarterly loss compares with net income of $6.1 million, or 6 cents per share, in the same period a year earlier. The bottom line included a number of one-time charges, including a $12.3 million "goodwill impairment" charge for the company's acquisition of Home Financial Network Inc. in 1999. Quarterly sales were down 11% from $236.7 million in the year-ago quarter. Software license revenue in the quarter was $85.9 million, down 18% from one year ago.
"I was personally surprised. The win rate was higher than I expected before we went into the quarter," Chen says. Demand was especially strong in government and health-care markets. Sales of integration software, including application servers, portals, and electronic data interchange software from New Era of Networks Inc., which Sybase acquired in 2001, were up 21% year-over-year. Sales of other products were flat.
Sybase is projecting that in 2003, revenue will grow 3% to 4% and net income will increase by 10%. It says integration and middleware software sales will grow 15% this year and wireless technology sales will grow 10%: 20% when factoring in Sybase's pending acquisition of mobile software developer AvantGo Inc. That deal is expected to close in February or March.
For the fiscal year ended Dec. 31, Sybase reported a loss of $94.7 million, or 95 cents per share, on sales of $829.9 million. That compares with a loss of $25.5 million (27 cents per share) on sales of $927.9 million in fiscal 2001.
Sybase this week also disclosed a strategic relationship with systems integration and consulting firm BearingPoint Inc. under which the companies will jointly develop and install software. The alliance targets companies in the health-care industry and companies running PeopleSoft Inc.'s customer-relationship management application on Sybase platforms.
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