PARIS and PROVIDENCE – Dassault Systèmes, the French parent company of Providence-based virtual-testing developer Simulia, saw its earnings shrink at least 10 percent in the final quarter of 2008, the company said today. Total sales continued to rise, but only because of favorable changes in foreign exchange rates, the company added.
In the unaudited results released today, DS predicted 2008 full-year earnings of €2.01 to €2.06 per share (about $2.66 to $2.73 per share, at the current rate of exchange), an increase of 1.5 percent to 4.0 percent from its 2007 earnings of €1.98 per share (about $2.62), on full-year revenue that grew 5 percent to €1.34 billion (about $1.77 billion) – the bottom end of the company’s previously announced goal of €1.34 billion to €1.35 billion ($1.77 billion to $1.79 billion).
For the fourth quarter, the company predicted earnings per share of €0.65 to €0.70 (roughly 86 to 93 cents), a decline of 10 percent to 17 percent from its 2007 fourth-quarter earnings of €0.78 per share (about $1.03), on revenue that grew 3 percent year-over-year to €382 million (about $506 million).
In constant currencies, however, revenue fell 5 percent year-over-year despite a 12-percent increase in recurring software revenue.
“Our preliminary fourth-quarter financial performance reflected an increasingly difficult environment as the year-end approached,” DS President and CEO Bernard Charlès said in a statement. “This resulted in revenue coming in approximately €3 million lower than our objective as reported, or about €30 million [lower] in constant currencies.”
The main problem, he said, was “deferrals of contracts that were otherwise ready for final agreement and signing during December.”
But, Charlès added, “our underlying discussions with an important number of customers who deferred orders this past quarter clearly confirm their need for our software solutions and their intention to complete these transactions.” Moreover, he said, “our recurring software revenue continued to grow, increasing double digits in constant currencies for the fourth quarter.”
“In summary,” the CEO said, “despite the effects of the significant downturn in the macroeconomic environment during the fourth quarter, Dassault Systèmes finishes 2008 with growth in revenue and earnings, a high level of recurring software revenue and a strong balance sheet.”
The report was far gloomier than the third-quarter results DS released in November. (READ MORE) And unlike the third-quarter report – which praised Providence-based Simulia for its double-digit revenue growth – it made no mention of the performance of individual divisions.
Highlights of Simulia’s fourth quarter included the Nov. 19 release of Abaqus 6.8 Extended Functionality (6.8-EF), the latest version of the company’s market-leading finite-element analysis (FEA) software suite; and the Dec. 3 release of CZone for Abaqus, an add-on product to aid in simulations of “the crushing behavior of energy-absorbing laminated composites.
CZone “will provide significant value to the automotive and aerospace industries by enabling them to accelerate the design cycle and lower the costs of including new composite materials in their vehicles,” Graham Barnes, director of Engenuity, said in a statement accompanying the release. The new package incorporates the composite-crushing technology developed by Engenious, which Simulia acquired in the third quarter, with Abacus’ existing composite analysis capabilities.
Dassault Systèmes (Nasdaq: DASTY and Euronext Paris: DSY.PA) specializes in 3D and product lifecycle management (PLM) software. It is the parent of parent of the Providence-based Simulia, a developer of DS-simulation software including the Abaqus and Catia analysis applications. For more information, visit www.simulia.com.
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