SunGard Q2 operating profit slides

Source: SunGard

SunGard, one of the world's leading software and technology services companies, today reported results for the second quarter ended June 30, 2011. For the second quarter, revenue was $1.27 billion, up 1% year over year (down 2% adjusting for currency).

Excluding one of our global trading businesses, a broker/dealer, revenue increased 4% (1% adjusting for currency). Operating income was $106 million in the quarter compared to $125 million in the second quarter of 2010. Adjusted EBITDA was $325 million and adjusted operating income was $241 million. Adjusted EBITDA and adjusted operating income are defined in Notes 1 and 2 in the Notes attached to this release.

Russ Fradin, president and chief executive officer, commented, "While it's still early in my tenure as CEO, I see opportunities for us to improve our performance and build a stronger company. I've been spending a lot of my time meeting with customers, and I'm impressed with the high esteem in which they hold SunGard. It's very energizing to lead an organization that is so highly regarded by its customers and has so many talented people."

Financial Systems revenue was $714 million in the second quarter, up 2% year over year (down 2% adjusting for currency). Excluding the broker/dealer business mentioned above, revenue increased 8% (3% adjusting for currency). License fees were $69 million, an increase of $3 million compared to the second quarter of 2010.

Notable deals in the quarter included the following:
• One of the world's leading asset management companies selected SunGard's Asset Arena to help streamline its portfolio accounting platform.
• Four equities exchanges in Southeast Asia selected SunGard to provide a cross-border trading platform and order routing service.
• A worldwide electronics leader selected SunGard's AvantGard to help optimize its treasury operations and cash management.

Higher Education revenue was $150 million, unchanged compared to the second quarter of 2010. License fees were $15 million, an increase of $4 million compared to the second quarter of 2010.

Notable deals in the quarter included the following:
• A large community college system in the US Southeast selected SunGard to provide a full range of digital campus products and services.
• One of the most recognized educational institutions in Latin America selected SunGard to provide a comprehensive suite of products and services including the Banner Digital Campus.
• A public school district in Florida selected SunGard's eSchoolPLUS student information system and PerformancePLUS assessment management software.

Public Sector revenue was $36 million, unchanged compared to the second quarter of 2010. License fees were $2 million, a decline of $1 million compared to the second quarter of 2010.

Notable deals in the quarter included the following:
• A county in Michigan selected SunGard to provide computer-aided dispatch and mobile computing solutions to its centralized dispatch operations agency.
• A county in Florida selected SunGard to provide a new platform for computer-aided dispatch, records management and mobile computing.

Availability Services revenue was $366 million, flat year over year (down 3% adjusting for currency).

Notable deals in the quarter included the following:
• A leading specialty health care management company extended its relationship with SunGard to provide ongoing recovery services and implement an advanced recovery solution.
• One of the fastest-growing energy companies in the US selected SunGard to provide cloud services for hosting and infrastructure management.
• A leading insurance company based in the UK selected SunGard to provide cloud services for hosting and infrastructure management.
For the six months ended June 30, 2011, revenue was $2.48 billion, up 1% year over year (down 1% adjusting for currency). Adjusted EBITDA was $607 million and adjusted operating income was $445 million. Excluding the broker/dealer business mentioned above, revenue increased 4% (1% adjusting for currency).

Financial Position

At June 30, 2011, total debt was $8.08 billion and cash balance was $821 million. Year to date, the Company generated $177 million in cash flow from operations, invested $133 million in capital expenditures, and spent $26 million on acquisitions net of acquired cash. 

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