Tight Rein On IT Spending Puts Sybase In The RedTight Rein On IT Spending Puts Sybase In The Red

Citing smaller orders and deferred buying decisions, Sybase Inc. on Thursday reported a $116.4 million ($1.14 per share) net loss on sales of $211.0 million for its first quarter ended March 31. That compares with a $14.9 million (16 cents per share) profit on sales of $229.7 million in the same period one year earlier.

Customers are still keeping a tight rein on IT spending, delaying buying decisions and placing smaller orders when they do buy, says president and CEO John Chen. "Smaller deals, deals taking longer to close," he lamented. Sales were particularly tough in financial services and telecommunications, two of Sybase's key markets.

Sybase, a supplier of infrastructure and integration software, reported that license fees dropped 15%, to $83.8 million, from $98.8 million one year earlier. Sales of E-business integration and business-intelligence software were strong, while sales of other products, including the Sybase database and mobile applications, were down. Service revenue declined nearly 3%, to $127.2 million.

Sybase reported net income of $21.1 million (21 cents per share) on a pro forma basis. But one-time charges, including a whopping $132.5 million charge to adopt new amortization accounting rules, put the company far into the red.