Fintech giant SunGard says its customers are "carefully managing their IT spending" following the credit crunch and warns that "extended sales cycles and delays in discretionary projects" at some larger accounts will impact its business in the second half of the year.
"Our customers are carefully managing their IT spending in the wake of the credit crisis," says Sungard president and chief executive officer, Cristóbal Conde, in a statement accompanying the vendor's second quarter results.
"We expect to see further impact in the second half of the year," he warns.
Conde says SunGard's recurring revenue model and multi-year contracts will help reduce the impact, as well as the vendor's expansion in international distribution. During the second quarter SunGard signed its first treasury sale in China, first retail banking sale in Russia and first insurance sale in Eastern Europe, says Conde.
"We remain very competitive and are in a favourable position to withstand the deterioration in market conditions," he adds.
For the three months ended June 30 SunGard group revenue was $1.36 billion, an increase of 15% compared to the same period in 2007. Reported income from operations was up seven per cent to $145 million. Adjusted Ebitda was $372 million, an increase of nine per cent from the year ago period.
Revenue increased 20% at the firm's financial systems division to $710 million for the quarter. Organic revenue grew approximately 17%, although SunGard says this includes a seven per cent increase attributable to a broker/dealer businesses, which exceeded expectations for the quarter and is not expected to continue.
However, in what may be a sign of things to come, licence fees at the unit fell during the quarter to $52 million - a decrease of $4 million compared to the same period in 2007.
The highly-acquisitive firm said last week that it intended to acquire French dealing systems vendor GL Trade for EUR41.70 per share. The US firm will initially acquire a majority 64.51% stake from a group a major shareholders before launching an all-cash tender offer for the remainder of GL Trade's share capital at the same price.