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ULTRASHORT S&P500 PROSHARES Reports Operating Results (10-Q)

August 13, 2012 | About:
10qk

10qk

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ULTRASHORT S&P500 PROSHARES (SDS) filed Quarterly Report for the period ended 2012-06-30.

Proshares Ultrashort S&p500 (etf) has a market cap of $237.2 million; its shares were traded at around $14.57 . The dividend yield of Proshares Ultrashort S&p500 (etf) stocks is 3.8%.

Highlight of Business Operations:

Total reported revenue decreased $49 million, or 4%, for the three months ended June 30, 2012 compared to the second quarter of 2011. On a constant currency basis, revenue decreased $23 million, or 2%. Approximately $21 million of the $23 million decrease was due to a decrease in revenue from one of our Capital Markets businesses, a broker/dealer. This business, whose performance is a function of market volatility and customer mix (the Broker/Dealer), had an inherently lower margin than our other financial systems businesses. The $21 million decrease was due primarily to no longer providing correspondent clearing services for a large, former Broker/Dealer customer that has since begun to self-clear its broker/dealer operations. The remaining decrease in total revenue is due mainly to a $14 million decrease in AS recovery services and a $6 million decrease in FS professional services revenue, partially offset by an increase in FS software license revenue of $9 million and a $4 million increase in AS managed services.

FS reported revenue decreased $31 million, or 4%, in the second quarter of 2012 from the prior year period, and decreased 2% on a constant currency basis. Four percentage points of the decrease on a constant currency basis was related to lower revenues from the Broker/Dealer. Reported revenue from license and resale fees included software license revenue of $73 million, an increase of $4 million, or 6%, compared to the same quarter in 2011. On a constant currency basis, software license fees increased $9 million, or 13%, due primarily to an increase in high-value, multi-year license transactions with some scope expansion. Professional services revenue decreased $6 million, or 4%, due primarily to successful completion of projects in the second quarter of 2011 and relatively lower demand in 2012 driven by economic conditions and related budget constraints.

Sales, marketing and administration expenses as a percentage of total revenue was 25% and 26% in the three months ended June 30, 2012 and 2011, respectively, and decreased $19 million. Decreases in sales, marketing and administration expenses were due primarily to decreases in corporate employment-related expenses of $15 million mainly as a result of executive transition costs incurred in the second quarter of 2011; FS employment-related expenses of $7 million due primarily to the impact from severance actions taken in 2011; external services fees of $4 million; and AS and corporate advertising expense of $4 million mainly resulting from cost savings initiatives; partially offset by increases in FS facilities costs; FS currency transaction losses of $3 million; AS employment-related expenses of $2 million; and management fee expense of $2 million.

Total reported revenue decreased $96 million, or 4%, for the six months ended June 30, 2012 compared to the first quarter of 2011. On a constant currency basis, revenue decreased $63 million, or 3%. Approximately $45 million of the $63 million decrease, or two of the three percentage points of decrease, was due to a decrease in revenue from the Broker/Dealer. The remaining decrease is due mainly to a $28 million decrease in AS recovery services, a $20 million decrease in FS software license revenue and an $8 million decrease in FS professional services revenue, partially offset by a $12 million increase in FS processing revenue, an $11 million increase in AS managed services and $9 million from FS acquisitions.

FS reported revenue decreased $71 million or 5% in the six months ended June 30, 2012 from the prior year period, and decreased 3% on a constant currency basis. Three percentage points of the decrease in constant currency was related to lower revenues from the Broker/Dealer. Reported revenue from license and resale fees included software license revenue of $93 million, a decrease of $26 million, or 21%, compared to the first half of 2011. On a constant currency basis, software license revenue decreased $20 million, or 17%, due mainly to high-value, multi-year license renewal transactions with some scope expansion recognized in 2011, including one deal worth $14 million, for which there were no similarly sized transactions in 2012. Processing revenue increased $12 million, or 3%, due mainly to the impact of new business signed in 2011, higher volumes in 2012 and annual rate increases and increased $3 million due to acquisitions. Professional services revenue decreased $8 million, or 3%, due primarily to successful completion of projects during the first half of 2011 and relatively lower demand in 2012 driven by economic conditions and related budget constraints, and was offset in part by a $4 million increase from acquisitions.

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