Business software giants report mixed quarters

22 Jan 2004

Business software players Computer Associates and SAP both turned in mixed third and fourth quarter results, respectively. While Computer Associates saw a 12pc increase in total revenues generated in the third quarter to reach US$844m, German software player SAP saw total revenues of €2.2bn in the fourth quarter dip 3pc year-on-year.

At Computer Associates (CA), software fees and other revenue increased US$9m or 12pc over the September 2003 quarter. The sequential improvement in revenues was driven by increased sales of both BrightStor and eTrust products.

While revenue performance for the third fiscal quarter exceeded the company’s projections, certain costs were also higher than anticipated. Commissions and royalties increased approximately US$20m compared to the second quarter of fiscal 2004 due to very strong product bookings in the quarter.

“We obviously are pleased with the company’s performance in the third quarter,” said Sanjay Kumar, CA chairman and CEO. “Overall bookings, which increased substantially over last year, performance in our channel business, and strength in worldwide operations all contributed to this strong performance. Even after considering the impact of the ACCPAC disposition, we achieved revenues, which exceeded the high end of our previous revenue estimate by approximately US$27m.” In December, CA sold its ACCPAC subsidiary to The Sage Group in a transaction that is expected to generate a pre-tax gain for CA of around US$88m.

“Our strengthening competitive position, our ability to deliver world-class enterprise software management solutions and the improving economy contributed to our strong third quarter results,” Kumar continued. “We are also making measurable progress in our determined worldwide efforts to go from a preferred vendor to a technology partner of choice.”

At SAP, net income for the fourth quarter was €423m, down from €474m announced a year earlier. Total revenues fell 3pc to €2.2bn and software revenues were €931m, down 3pc from the same period last year.

For the full year 2003, SAP saw total revenues of €7bn, a 5pc slide on the previous year. Software revenues were €2.1bn, a 6pc decrease compared to 2002. The company said it now considers itself to be the largest CRM application software vendor when measuring its CRM software revenu3s against its competitors on a rolling four-quarter basis. Net income for 2003 was a record €1.7bn, up from €509m a year earlier.

“2003 was a challenging but excellent year for SAP, as we reported record operating income, earnings per share, margin growth and gains in share against our next four largest competitors,” said Henning Kagermann, chief executive officer of SAP. “Additionally, both software and total revenues grew year-over-year on a constant currency basis, outperforming our competitors.”

By John Kennedy