Sybase Inc saw earnings rise above analysts expectations in its second quarter, announced yesterday, but revenue dropped 3.5% to $210.2m, compared with $217.9m in the same period last year. That included a fall in software revenue of nearly 10% to $95.7m from $105.9m. Income was up 142% to $14.3m, or $0.17 a share, compared with the $0.10% analysts had predicted.
The increase was mostly attributable to cost cutting. Sales and marketing spend dropped by 22% and services costs fell 7%. The revenue decline was blamed on Year 2000 project deferrals in the financial sector, and a sales slowdown caused by the forthcoming launch of the next upgrade of the Sybase Adaptive Server database, code-named Avatar. Currently in a beta testing program expected to be complete by September, Avatar will add support for the Java virtual machine, Java class libraries and XML, and will be aimed at the lucrative e-commerce market. Sybase has also been re-training its sales force to concentrate on new market areas, which caused further disruption.
John Chen, president and CEO, said he was focusing on profitability and cash generation, so that the company can invest in new business opportunities – particularly mobile and embedded computing, business intelligence and e-commerce. Chen said Sybase would continue to focus on vertical markets such as financial services, healthcare and telecommunications. I’m very pleased with our performance over the last five quarters he said.
