SunGard meets expectations

SunGard meets expectations

SunGard's fiscal results have come in at the high end of analysts expectations, with a 15% increase in fourth quarter net income and 17% rise in full year income, excluding merger costs, over the equivalent periods in 2000.

Net income for the quarter ended 31 December, 2001, excluding merger costs and other one-time items, was $75.6 million, up from $65.6 million for the same period in 2000. Revenue stood at $562.4 million, an increase of 22% over revenue of $461.7 million for the same period in 2000. For the full-year 2001, revenue was $1.93 billion, 16% up on revenue of $1.66 billion for the previous year.

Net income including merger costs and other one-time items for Q4 2001 was $65.6 million, up 5% over the previous year.

"SunGard grew solidly in 2001, despite a depressed economy and the events of September 11," says James Mann, chairman and chief executive officer.

He is forecasting growth of between 15% and 20% for 2002.

Fourth quarter and full-year 2001 revenue includes $60 million from the newly acquired Availability Solutions business of Comdisco. Organic revenue growth is disappointingly flat and analysts will be watching the group's performance in its core businesses with some interest over the coming months. The company recently let go of one-fifth of the workforce in its Global Markets division following a sluggish year.

Looking ahead, Cristobal Conde, president and chief operating officer, says the integration of Comdisco's Availability Solutions business into SunGard is going according to plan. "We have reduced headcount by 15% and plan to reduce total data center space by 10%, with no reduction in equipment," he says.

Upon completion of the integration, SunGard will support more than thirty operating platforms, sixty facilities with 2.5 million square feet of space and 14,000 end user recovery positions, says Conde.

SunGard completed seven acquisitions during 2001, for a total investment of $880 million in cash and 8.3 million SunGard shares. For the acqusition of the Comdisco business SunGard borrowed $450 million, including $100 million in short-term borrowings and $350 million in long-term.

In connection with the company's borrowings, SunGard was assigned a Baa2 senior unsecured debt rating by Moody's Investors Service and a triple-'B'-plus corporate credit rating by Standard & Poor's.

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