Sage UK affirms 9 months earnings expectations

Sage UK have released their 9 month earnings statement and are indicating that earnings are expected to be in line with management expectations.

Sage Earnings Meet Expectations

According to the company press release:

Results for the nine months to 30 June 2009 were consistent with management expectations. Market conditions in the quarter ended 30 June 2009 have remained challenging but largely unchanged. Subscription revenues continue to show solid growth and the cost base has been successfully reduced to address the slowdown in the market for software and software-related services.

Contrast To Microsoft 29% Earnings Decline

On July 23 Microsoft reported profits had declined 29% and revenues declined 17% (the first earnings miss since the company went public in 1980).

Link: Redmond Faces The Future After Its Lousiest Year Ever

According to press reports (Bloomberg) on the Microsoft earnings:

Sales declined in all of Microsoft’s main business units. Windows software revenue dropped 29 percent after the PC market contracted for three straight quarters. Some customers are holding off purchases until a new version of Windows comes out in October. Demand for Office software and advertising on Microsoft’s Web sites also waned.

“It’s a real disappointment,” said Brendan Barnicle, an analyst at Pacific Crest Securities in Portland, Oregon. He has an “outperform” rating on the shares. “It’s a significant miss” in revenue.

Continuing Market Outlook

The continuing market outlook for Sage was stated by Sage UK Chairman Paul Walker as:

There has been no significant change in market conditions during the quarter ended 30 June 2009 and we are planning for markets to remain testing. However, our proven business model and large, geographically diverse, customer base give us confidence that we are well positioned for these conditions and the eventual market recovery. We expect to report results for the year ended 30 September 2009 in-line with market expectations.

The Sage Group plc is a leading global supplier of business management software and services to 5.8 million small and medium-sized enterprises in over 30 countries. Formed in 1981, Sage was floated on the London Stock Exchange in 1989 and now employs over 14,500 people worldwide.

Market consensus of the 24 analyst research notes published after 6 May 2009 for the year to 30 September 2009 is as follows: Revenues £1,452m, EBITA £328m and PBT (pre-amortisation) £306m.

via: Schulz Consulting Sage MAS 90 Consulting

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