Sybase reports lower revenue, but growth in services

Corporate software maker Sybase Inc. cited the weakened economy, particularly in the United States and Europe, as the cause of declining revenue it reported Tuesday. Revenue for the company's third fiscal quarter of 2001, ended Sept. 30, was US$226.3 million, down from $239.1 million in the year-earlier quarter.

Sybase reported pro forma earnings of $0.20 per share, slightly topping the $0.18 per share consensus estimate of analysts polled by Thomson Financial/First Call. Pro forma net income for the quarter was $20 million, vs. $26.7 million in third-quarter 2000.

Sybase's pro forma calculations exclude in-process research and development costs, restructuring charges and amortization of purchased intangibles. Including those expenses, Sybase had a $7.1 million net loss for the quarter, a steep drop from its $16.5 million net income in the year-earlier period.

Sybase's new customer wins during the quarter came primarily from the U.S. Federal government and state governments, and from Asian corporations, the company said in a prepared statement.

Sybase's revenue from license fees dropped to $90.6 million, down from $114.4 million in last year's third quarter. However -- in line with results from previous quarters this year -- its services revenue grew to $135.7 million, from $124.7 million. Earlier this year, Sybase Chief Executive Officer John Chen attributed the company's services-unit growth to clients' unwillingness to commit to purchases -- in a down economy, services are a cost-effective way to meet technology needs, he said.

Sybase lost two employees who were working on the 106th floor of the World Trade Center North Tower on Sept. 11, the company disclosed in a note accompanying its financial results.

Ahead of the financial report, shares of Sybase (SY) closed down $0.04, at $11.51, in Tuesday trading on the New York Stock Exchange.

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