Acquisitions mask revenue stagnation at SunGard

Acquisitions mask revenue stagnation at SunGard

Excluding acquired businesses, SunGard revenues remained broadly flat through 2002, with Investment Support Systems recording a two per cent drop in organic revenues from the depressed financial market sector.

GAAP net income for the year ended December 31, 2002 was $326 million, a 32% increase over $246 million for 2001. Net income for the quarter was $96 million, a 46% increase over $66 million reported in the same period in 2001.

Revenue for full-year 2002 was $2.59 billion, an increase of 31% over the $1.98 billion reported for 2001. Revenue for the quarter was $702 million, an increase of 22% over $576 million reported in the year-ago quarter.

Excluding acquired businesses, however, revenue increased by only one per cent for the year and showed a one per cent drop for the quarter, compared to 2001 results.

Much of the drag on revenues stems from Investment Support Systems (ISS), which reported revenue growth including acquisitions of four per cent to $1.36 billion for the year. Quarter-over-quarter revenue grew by two per cent to $362 million. Organic revenues for the division were down two per cent for the year and four per cent for the quarter.

Cristsbal Conde, president and chief executive officer, comments: "While we operate in the same macro environment as our competitors, we benefit from a large client base that we serve efficiently on shared platforms. This gives us enviable economies of scale."

The company continues to identify acquisitions that complement its existing products, says Conde. During the first quarter of 2003, SunGard expects to spend approximately $370 million in cash on pending and previously completed acquisitions.

Conde forecasts growth of between eight and twelve per cent through 2003, although analysts expect revenues from continuing operations to remain broadly flat.

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