|SunGard Announces Third Quarter Results and Reaffirms 2003 Outlook|
Wednesday October 22, 5:03 pm ET
Net Income per Share Grew 15%
Revenue Grew 13%
WAYNE, Pa.--(BUSINESS WIRE)--Oct. 22, 2003--SunGard (NYSE:SDS), a global leader in integrated IT solutions for financial services and the pioneer and leading provider of information availability services, reported today that net income for the three months ended September 30, 2003 was $92 million, an 18% increase over $78 million for the third quarter of 2002.
Diluted net income per share for the quarter grew 15% to $0.31, which included $0.01 per share of merger costs for the quarter, as compared to the $0.27 reported in 2002, which included $0.02 per share of merger costs. Details concerning merger costs are described in the Notes attached to this release. Earnings per share before merger costs for the quarter were $0.32, up 10% from $0.29 in the third quarter of 2002.
For the first nine months of 2003, net income and diluted net income per share were $258 million and $0.89, respectively, increases of 12% and 13% over comparable results reported in 2002.
Revenue for the third quarter of 2003 was $742 million, an increase of 13% over the $660 million reported in the year-ago quarter. Revenue from businesses owned for at least a year (internal revenue) was unchanged from the same period in 2002. Revenue for the first nine months of 2003 was $2.15 billion, an increase of 14% over the $1.89 billion reported for 2002.
Cristobal Conde, president and chief executive officer, commented, "SunGard has performed solidly in 2003. Over the past three years, IT spending has been characterized by cost-cutting and an overriding focus on resilience. Today, we see our leading customers putting an equal emphasis on gaining market share. As a result, we see an improvement in the size and quality of leads coming into our pipeline, especially for offerings on an ASP or outsourced basis where we can leverage our economies of scale and resilient IT infrastructure. Our competitiveness is stronger than ever."
"Our outlook for 2003 diluted net income per share is in the range of $1.23 to $1.28, which includes $0.01 per share of merger costs incurred through the end of September. Therefore, excluding merger costs, our original outlook of $1.24 to $1.29 per share remains unchanged. Because the timing of acquisitions and the amount of merger costs are unpredictable, this outlook assumes that we will have no further merger-related items in 2003. It also assumes neither a rebound nor a further deterioration in demand in 2003," added Mr. Conde.
Investment Support Systems (ISS) revenue grew 18% to $404 million in the quarter due to acquisitions. ISS internal revenue declined approximately 1% for the quarter, due primarily to the slowdown in IT spending. Financial services firms are increasingly focusing on their competitiveness. With deep customer relationships, a broad product portfolio and a strong investment program, SunGard is well positioned to help customers achieve their goals.
Availability Services (AS) revenue grew 2% to $290 million in the quarter due primarily to currency fluctuation. IT capital spending, which has been flat, is a key driver in business continuity spending. The blackout in August and Hurricane Isabel in September provided fresh proof of the extent to which businesses depend on IT and require resilience.
Other Businesses revenue increased 46% to $48 million due to the acquisition in March of H.T.E., Inc., a leader in government information technologies.
SunGard has exceptional financial strength and flexibility, which allows it to consistently invest in its business. In the quarter, SunGard spent 11% of ISS revenue on product development. At September 30, 2003, cash balances were $306 million and long-term debt remained at $188 million. For the first nine months, cash flow from operations was approximately $438 million, and cash balances decreased $134 million after spending $421 million on eight acquisitions and $145 million on capital expenditures company-wide.