Acquisitions drive profits at SunGard as internal revenues decline
24 July 2003 | 3945 views | 0
Profits rose again at SunGard for Q2 2003, with the firm reporting a 10% increase in net income compared to a year ago, but internal revenue - which excludes acquired businesses - declined one per cent compared to Q2 2002.
SunGard reported a net income of $90 million for Q2 2003 compared to $82 million for the second quarter of 2002. Diluted net income per share for the quarter was $0.31, up 11% over comparable results of $0.28 reported in 2002.
However, although revenue for the second quarter of 2003 was $734 million - an increase of 18% over $623 million reported in the year-ago quarter - revenue from businesses owned for at least a year declined approximately one per cent from the same period in 2002.
The vendor continues to blame the slowdown in IT spending for yet another fall in internal revenues at its Investment Support Systems (ISS) division, which reported a five per cent decrease in Q2 2003. Overall revenue at ISS increased 11 per cent to $384 million for the quarter, but again, this was due to acquisitions.
At SunGard's Availability Services division, revenue increased 22% to $290 million for the quarter, primarily due to the July 2002 acquisition of Guardian iT. Internal revenue at the division increased 4% for the quarter.
Across other businesses, revenue increased 57% to $41 million because of the vendor's acquisition in March of HTE, a provider of government information technologies. Internal revenue across these other businesses declined four per cent for the quarter.
Cristóbal Conde, president and chief executive officer, maintains that SunGard performed solidly in the quarter.
We continue to invest in technology, acquisitions and customer relationships to introduce new solutions and services, and to enhance capacity," he says.