Exclusive Online Only ContentSungard’s Financial Systems Business Drops 15%
November 6, 2009
Sungard Data Systems, a supplier of risk management, trading, brokerage and clearance software, said its revenue from ongoing financial systems business fell 15% in its third quarter, from a year ago.
About 8% of the decrease came, it said, from one of its broker-dealer businesses, where revenue had been “ uncharacteristically high” as a result of the kind of market volatility seen since the capital markets crisis unfolded last fall and of the changing mix of its customers.
Sungard’s financial systems revenue has declined in two of the past three quarters.
There is more pain to come. The company warned that “the largest customer in this business has given us notice that it plans to decrease its use of our services beginning in the first quarter of 2010 as a result of impending regulatory changes,” the Wayne, Pa., company said in a prepared statement.
The impact of that “customer departure” will be $384 million in revenue and at least $35 million in income from operations next year.
The company "can't disclose" the identity of the customer, said George Thomas, its vice president of corporate communications. The company is a customer in Sungard's broker-dealer business, he said.
The 15% decline came in “organic” revenue. In Sungard’s terms, “organic” revenue comes from businesses owned for at least one year and excludes revenue from businesses sold in the previous twelve months.
Total financial systems revenue decreased 6% to $724 million for the quarter. License fees were $38 million for the quarter, $3 million higher than the same quarter in 2008.
The company as a whole reported $1.3 billlion in revenue for the quarter ended September 30, down 4 percent from a year ago.
Adjusted income from operations was $300 million, a 3% increase from 2008.
