Since bottoming out at $20 in late July, the stock price of enterprise software company Sybase
In the third quarter, revenues increased 5% to $209.1 million, with software license revenues rising an encouraging 9% to $76.3 million. Such sales are key to software companies' future growth, since they lead to ongoing maintenance and service revenues.
Net income was $25.1 million, or $0.27 per share, which compares to $28 million or $0.30 per share in the same period a year ago. Sybase also generated $38.9 million in operating cash flow in the third quarter. In all, the company has $979.5 million in the bank.
Sybase got its start as a database developer in the mid-1980s, but was forced to adapt as Oracle
The enormous success of Research In Motion
That's why Sybase's recent acquisition of Mobile 365 is so important. Besides providing mobile messaging technology (such as through SMS or instant messages), Mobile 365 has more than 700 carrier relationships.
In addition, Mobile 365's technology is delivered as a hosted application. This is becoming much more popular in enterprise markets, as seen with the success of Salesforce.com
Sybase has raised its guidance following the Mobile 365 acquisition. For 2006, the company predicts earnings of $1.09 to $1.12 per share.
Sybase faces the same challenge as many enterprise software companies: finding growth. But according to the company, the mobile messaging market is expected to reach $7.5 billion by 2008. With Sybase's broad offering and extensive background in dealing with major customers, it may have a good chance to juice up its growth for the long haul.
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Fool contributor Tom Taulli does not own shares mentioned in this article.