Sybase posts Q2 profit despite weak sales

Database vendor Sybase Inc. posted a profit for its second quarter due in large part to its cost-cutting measures of the past year.

The Dublin, California, company reported net income of US$20.2 million for the quarter ended June 30, or $0.20 per share, compared with a loss of $39.5 million, or $0.42 per share in the same quarter last year, Sybase said in a statement Thursday.

For the second quarter, Sybase reported pro forma diluted earnings per share of $0.26, exceeding the $0.24 earnings per share analysts had expected, according to a Thomson Financial/First Call survey. Some items excluded from the pro forma results are amortization of goodwill and purchased intangibles, stock compensation expense and restructuring charges, Sybase said.

Revenue for the quarter came in at $205.3 million, a 12.4 percent decline compared with revenue of $234.7 million in the year ago quarter, Sybase said.

Sybase, which competes against such software powerhouses as Microsoft Corp., Oracle Corp. and IBM Corp., had previously forecast revenue of $215 million to $220 million resulting in earnings of $0.25 per share, but due to "persistent weakness in the overall economy," revised those figures downward earlier in the month.

According to Sybase, its core database and infrastructure business "remains strong" and the company was seeing "positive momentum" in Asia, and in China in particular. As a result, Sybase is "cautiously bullish" on the prospect for a recovery in the upcoming quarters, said John Chen, Sybase's chief executive officer and president, in a conference call after the results came out that was recorded and posted on the company's Web site.

Cost-cutting within the company will continue and Sybase will most likely divest itself of "noncore" businesses and operations, Chen said. Sybase will also reallocate existing resources to achieve greater efficiencies in its overall business, Chen said.

Sybase will increase its field sales force, especially in Asia and Europe, in the coming quarters, Chen said.

The company also plans to grow its database business with increased investments in technology, including security advancements, as well as making sure that all of Sybase's products run on Linux, Chen said. Sybase will broaden its channel to the education and media market via a deal with Apple Computer Inc. while also focusing on database-related applications, Chen said.

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