SSAX interview posted at 2005 this evening
By Susan Nadeau
CHICAGO, Dec 9 (Reuters) - System Software Associates Inc
said Tuesday that higher-than-expected services revenues, which
offset lower-than-expected licensing revenues from Asia in its
fiscal fourth quarter, are expected to continue strong in the
new fiscal year.
In an interview, Chairman and Chief Executive Roger Covey
said that Asia typically accounts for about 20 percent of
revenues but was less during the fiscal fourth quarter.
"For the year as a whole our software license revenue was
up 34 percent. It wasn't up as much in total as we would have
liked for the fourth quarter ... but we made it up in service
revenue," he said.
"I don't think people should take what happened in Asia in
the fourth quarter and extrapolate it to North America and
Europe, or even to Japan or China" where licensing revenues
were solid, Covey said.
System Software, which provides enterprise resource
planning (ERP) software and services, on Monday reported fiscal
fourth quarter earnings of $0.01 a share after charges, versus
a loss of $0.13. Some analysts said the company did not meet
estimates and cited the ongoing turmoil in Asia.
"We don't think the problems in the Asian economies such as
Korea are going to be solved in the short term," Covey said.
"However, the rest of our business continues to be strong --
including other markets in Asia, including China and Japan."
Shares of System Software lost more than 36 percent of
their value, dropping 5-9/16 to 9-11/16.
Covey declined to comment on earnings estimates, but said
the company was "delighted" with the quarter.
"We thought actually we had a really good quarter and sort
of got blindsided by all this today," he said.
Oracle Corp shares fell nearly 30 percent as a result of
missed earnings estimates due to troubles in Asia, and some of
System Software's stock price decline was attributed to the
Oracle slide. But Covey said despite the fact that System
Software products run with Oracle databases, System Software is
not necessarily affected.
"I'm not sure Wall Street is making that linkage
appropriately," Covey said.
Covey said the ERP market grew 30 percent annually, while
System Software's licensing revenues grew by about 34 percent,
showing a rise in market share. He pegged the company's market
share at about nine to 10 percent.
"It's our plan to continue to grow faster than the market"
on an annual basis, Covey said, adding the target is
"absolutely, completely feasible".
Covey also noted that Casey Cowell, founder of U.S.
Robotics, which merged with 3Com Corp , has joined
System Software's board. |
