By a News Reporter-Staff News Editor at Computer Weekly News -- SunGard, one of the world's leading software and technology services companies, reported results for the fourth quarter ended December 31, 2013. For the fourth quarter, revenue was $1.1 billion, flat year over year. Currency had no material impact on reported revenue for the quarter compared to the prior year. Operating income was $179 million, down 7% year over year. Operating margin was 16.1% in the quarter, down 1.1 points. Adjusted EBITDA was $372 million, down 6% year over year, and the adjusted EBITDA margin was 33.4%, down 2.1 points year over year. Adjusted EBITDA is defined in Note 1 attached to this release.
For the full year, revenue was $4.1 billion, down 2% year over year (down 2% adjusting for currency). Operating income was $461 million and the operating margin improved to 11.2%, compared to an operating income of $71 million last year, which included a goodwill impairment charge of $385 million. Excluding the goodwill impairment charge, operating income increased 1% year over year. Adjusted EBITDA was $1.2 billion, down 2% year over year, and the adjusted EBITDA margin was 29.1%, down 0.1 points year over year.
Russ Fradin, president and chief executive officer, commented, "SunGard's fourth quarter results reflect the investments we're making across the company to bring new products and services to market and to increase sales capacity, and I'm pleased with the progress we've made. In Financial Systems, we saw strong acceptance of our solutions, which resulted in improved revenue trends in the second half of the year. The Company's performance in 2013 demonstrates the strength of our business, based on highly recurring revenue flows, focused investments, disciplined cost management and operational excellence, which allowed us to increase cash from continuing operations by over $100 million. I'm confident that our strategic direction and operational improvements will continue to drive greater value for both our clients and the company."
On January 24, 2014, the Company announced its intent to split-off its Availability Services business from the Software and Processing businesses. These businesses are fundamentally different, serving vastly different customer needs and having very different business profiles. The Company expects this transaction to close as early as March 31, 2014, subject to satisfaction of various customary conditions.
Fradin commented, "The strategic separation into two financially strong, independent companies will bring greater clarity and alignment to each company's mission."
Andrew Stern, chief executive officer of SunGard Availability Services, commented, "We've made progress at SunGard Availability Services to strengthen and broaden our portfolio of products beyond traditional disaster recovery. As an independent company with $1.4 billion in revenue, we will have the scale, services, and focus to help ensure the availability of critical systems and data for our customers. Our fourth quarter results reflect the significant investments we've made in our Enterprise Managed Services, Cloud, and Recovery-as-a-Service (RaaS) solutions. Our infrastructure and services address today's availability challenges, positioning us well for future growth." Financial Systems ("FS") revenue was $717 million in the fourth quarter, up 1% year over year (flat year over year adjusting for currency). Growth in software license fees of 6%, to $97 million, and Professional Services of 7%, to $149 million, was partially offset by modest declines in other areas of the business. Adjusted EBITDA for the period was $253 million, down 2% from the prior year, and the adjusted EBITDA margin was 35.3%, down 0.8 points from last year. For the full year, FS revenue was $2.6 billion, down 2% year over year (also down 2% adjusting for currency). Adjusted EBITDA was $746 million, up 3% from the prior year, and the adjusted EBITDA margin was 29.2%, up 1.3 points from last year.
Keywords for this news article include: Software, SunGard Data Systems Inc.
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