ChatGPT's New Skills Resident Evil 4 Remake Galaxy A54 5G Hands-On TikTok CEO Testifies Huawei's New Folding Phone How to Use Google's AI Chatbot Airlines and Family Seating Weigh Yourself Accurately
Want CNET to notify you of price drops and the latest stories?
No, thank you

Sybase sales, profit slip

Despite a drop in revenue and net income, the software maker's CEO says he has a positive outlook for corporate spending and for the company's wireless business.

Software maker Sybase reported on Wednesday a drop in second-quarter revenues and earnings, but it managed to beat Wall Street's expectations, as it posted growth in both its data warehousing and services businesses.

The company's better-than-expected performance comes as the industry continues to experience constrained information technology spending and spotty improvement in some tech sectors. But John Chen, Sybase's chief executive, said he remains optimistic that the second half of the year will pick up.

"We finished the quarter on the high end of what we were expecting. We see business conditions improving?.and wireless and data warehousing are encouraging," Chen said.

Net income was $14.6 million, or 15 cents per share, for the period ended June 30, falling 28 percent from $20.2 million for the same period in 2002.

Net income reported on a pro forma basis was $23.2 million, or 24 cents a share. This beat analyst consensus estimates of 21 cents a share, according to First Call. Sybase's pro forma figure excludes amortization of purchased intangibles, stock-based compensation and restructuring charges and reversals, according to Sybase.

Sybase reported revenues of $192 million, compared with $205 million in the same quarter last year. Analysts were expecting the company to generate $186.3 million, according to First Call.

The company's license revenues fell to $63.9 million in the quarter, down from $77.5 million a year ago. Enterprise licenses, which contribute the largest portion within the category, dropped 10 percent, to $35.5 million in the quarter. But the decline in enterprise licenses was tempered by growth in Sybase's database and replication server product lines, which grew 6 and 20 percent, respectively, in the quarter.

Sybase's services business, however, posted a slight gain in the second quarter to $128.1 million, up from $127.8 million a year ago. Within the services business, Sybase's wireless business increased to $22.7 million in the quarter--up 15 percent over last year.

But Chen noted that the company's integration business remains weak.

"That is also unfortunately true for the industry," he said.

Chen also said the Dublin, Calif.-based company's investment in wireless initiatives, including Wi-Fi services, is paying off.

Sybase purchased mobile communications company AvantGo in December for about $38 million. Sybase also has a strong position in the mobile database market with its iAnywhere Solutions subsidiary. The iAnywhere database is used to build business applications that run on wireless devices.

An IDC report that was published this week found that iAnywhere had displaced Research In Motion for the lead in the market for so-called mobile middleware.

Once a database and tools powerhouse, Sybase has diversified its business, notably into wireless software and middleware, or server-based software that connects disparate systems. The company sells its namesake database and associated business intelligence tools as well as development tools, a Java application server, a corporate portal server and wireless-related software.

Chen reiterated Sybase's earnings forecast for the year: 95 cents to $1.05 a share. Analysts currently estimate that Sybase will generate 93 cents a share for the year, according to First Call.

Chen also said the company's third quarter earnings and revenue performance is currently in line with Wall Street's estimates.

Shares of Sybase were up 53 cents a share, or about 3.63 percent, to $15.13 in late morning trading.