Sybase earnings fall just short of projections
Sybase posted net income of $13.2 million, or 13 cents per share, for the first quarter, compared with profits of $13.1 million, or 13 cents per share, for the same period last year. The Dublin, Calif., firm's pro forma earnings of 18 cents per share just missed analysts' average projection of 19 cents per share, as published by Thomson First Call.
Sybase had revenue of $183.2 million for the first quarter, which ended March 31, versus $181.5 million one year ago, representing growth of roughly 1 percent over the same quarter last year. The company reported product license revenue of $57.9 million for the quarter, versus the $50.9 million in sales it reported for the first quarter of 2003. Sybase Chief Executive John Chen said the company would have reported higher software license sales if not for several large deals that the company could not complete before the quarter's end. Sybase had first-quarter services revenue of $125.3 million, compared to its total of $120.6 million from one year ago.
In a Webcast meeting with analysts and the media, Sybase reaffirmed the company's financial outlook for the year, and said it expects the database technology maker to generate second-quarter revenue of $200 million, or earnings of roughly 25 cents per share. Sybase executives said the company could add as much as $5 million to its revenue for the second quarter based on completion of its $95 million acquisition of data management applications maker XcelleNet, announced at the beginning of April.
In addition to reporting earnings, Sybase announced a deal to acquire the assets of privately held Dejima, a maker of mobile access software, for an undisclosed amount of money. As with XcelleNet, Sybase plans to integrate Dejima with its iAnywhere Solutions subsidiary, which builds software that companies use to let employees wirelessly access corporate networks. The acquisition is the latest move by Sybase to expand its presence in the so-called mobile middleware sector, where the iAnywhere unit has unseated rival Research In Motion as the top vendor of wireless access tools.
Chen told investors that he remains pleased with the company's overall performance in the mobile and wireless data access sector, and projected 20 percent growth for that portion of the business in 2004. Chen said he expects single-digit growth for Sybase's core database business in 2004.
"We believe our momentum in mobile and wireless, which will be further enhanced by the completion of our acquisition of XcelleNet, the release of our new real-time database, and increased traction in Asia/Pacific, all signal positive growth for Sybase in the second half of the year," Chen said.
Chen highlighted the company's continued growth in the Asia/Pacific region and indicated that Sybase's revenue for the United States and Europe remain essentially flat. The executive stressed growth across the company's iAnywhere division as a major theme in the near future.
With the buyout of San Jose, Calif.-based Dejima in a cash deal expected to close in the second quarter of 2004, Sybase adds natural language processing capabilities to its array of mobile data access expertise. Dejima's product portfolio includes 16 patents related to natural language processing technologies designed to let customers interact with data sources using colloquial language.
"This move positions Sybase to play a pioneering role in the next technology wave; empowering users to easily leverage sophisticated enterprise and other information systems no matter what their level of technical expertise," Terry Stepien, president of iAnywhere, said in a statement.
Sybase played up Dejima's relationship with hosted business applications vendor Salesforce.com as another benefit of the deal. In February, Salesforce.com reached agreements with IBM and Sybase aimed at expanding development and integration capabilities for its application software.