Sanchez swings to Q2 loss, downgrades annual earnings estimates
30 July 2003 | 3286 views | 0
US banking systems and services vendor Sanchez Computer Associates has revised annual earnings estimates downwards after reporting a second-quarter loss.
Although second-quarter revenues grew 7.6% to $24 million, in line with forecasts, the company reported a loss of $0.34 million compared with year ago earnings of $0.23 million. The loss includes a one-off charge of $0.32 million incurred by Sanchez as it relocated its European headquarters from London to Amsterdam.
The company was also hit by a 27% fall in service revenue as a result of decisions made by clients to delay anticipated service projects. Product revenue grew by 121% from $2.8 million in 2002 to $6.3 million, thanks to returns from two of the firm's major implementation projects - Krung Thai Bank in Thailand and Scotiabank in Canada, the inclusion of results from the company's Wealth Management Division (acquired in 2002's third quarter) and the accretion of previously deferred licence revenue.
Warning that "certain initiatives with new and existing customers have been delayed", Sanchez has downgraded its forecasts for the year and estimates its annual revenues to grow to a range of $98 million to $103 million. The company estimates annual earnings in a range of $0.06 to $0.12 per share.
Sanchez had forecast in April that year earnings would reach 18 cents to 22 cents a share on revenue of $102 million to $112 million.