Sybase Sees Database Rebound, But Overall Sales Are DownSybase Sees Database Rebound, But Overall Sales Are Down

Sybase Inc. on Tuesday reported improved earnings for the quarter ended Sept. 30, helped by growing sales of its database software and wireless technologies and services. But the company's revenue declined when compared with the same period a year ago, in part because of declining sales of its application-integration products.

The company generated $193.8 million in revenue in the quarter, compared with $203.0 million the same period a year ago. Software licensing fees dropped to $68.5 million, from $78.8 million a year ago, while services revenue was flat at $125.3 million. Net income nearly doubled to $22 million, compared with a year ago.

Sybase officials found reason to be optimistic by several developments: database licenses increased 11% over a year ago; sales of mobile and wireless products and services jumped 30%; cash holdings increased to $506 million, the most in the company's history; and revenue grew slightly in the third quarter compared to the second quarter.

"We're encouraged by the sequential overall improvement," says Marty Beard, senior VP of corporate development and marketing. "It looks like [corporate IT spending] has bottomed out and is starting to turn positively."

Sybase closed deals with new database customers in the quarter, attracted by an updated release of its Adaptive Server database, version 12.5.1, and recent availability of Adaptive Server on the Linux operating system, Beard says. Following the acquisition of AvantGo Inc. earlier this year, Sybase's mobile and wireless business is gaining ground, too.

The company's enterprise-application-integration business, however, declined in the quarter. "That business continues to be weak," Beard says. EAI products are increasingly being included within application servers, databases, and portal products, he says.

In December, Sybase plans to release an upgrade of its Adaptive Server that supports real-time data distribution when important events trigger an update to distributed devices.