SunGard has reported flat earnings and revenue from continuing operations in the fourth quarter and full year as merger and spin-off costs take their toll on results.
For the year ended 31 December, 2004 SunGard reported net income of $454 million, a 23% increase over $370 million for 2003. Excluding a $46 million gain from the sale of the Brut ECN and all merger and spin-off costs, diluted net income per share was $1.40, up 10% over comparable results of $1.27 in 2003.
Revenue for full-year 2004 was $3.56 billion, an increase of 20% over the $2.96 billion reported for 2003. Revenue for the fourth quarter was $917 million, an increase of 14% over the $804 million reported in the year ago period. However, revenue from businesses owned for at least one year and excluding revenue from Brut grew two per cent for 2004 and four per cent in the fourth quarter, with the impact of favourable exchange rates contributing approximately two per cent in each period.
In the financial services software business, Investment Support Systems (ISS) revenue grew 15% to $1.84 billion for the year. Fourth quarter revenue grew by two per cent to $466 million. ISS internal revenue grew 2.5% for the year and five per cent in the fourth quarter, including a two per cent favorable impact from currency changes during each period.
Most of the improvement came from the buy-side. ISS license sales were $149 million for the year and $46 million for the quarter.
In a statement, the firm says: "Cost-cutting continues to be important to many customers, resulting in more scrutiny and pricing pressure, but investment in growth opportunities and regulatory compliance continue to increase in importance."
SunGard shares lost 30 cents to $25.64 in after-hours activity - nullifying the gains achieved during Nyse trading hours.
SunGard has announced plans to spin-off its availability services business unit in the second quarter, which is expected to have a positive impact on growth across the baord.
Looking ahead, the company is forecasting growth in the low-to-middle single digits for the full year 2005. The estimates, based on full year 2004 figures, appear conservative, and fail to account for any momentum from a fourth quarter uplift at ISS and improving order backlog.