VAR500 2010 Earnings: Revenue Mostly Up

Some VARs See Sales Up, Others Need a Jump Start

Its earnings season. VAR500 solution providers, including Atos Origin, Capgemini, CDW, CIBER, Cerner, HP and Insight, reported on their financial well being this month.

By and large, solution providers' services revenue seems to be showing signs of growth, although the trend is not universal.

Atos Origin

Atos Origin reported a decline in sales of 3.5 percent for 2010, yet saw an increase in operating margins, in spite of recording a dip in sales. The European IT services group saw sales dip to $6.82 billion, due largely to the bankruptcy of its biggest client in Germany, Arcandor.

During the fourth quarter, revenue decline was down 1.2 per cent and excluded the impact of Arcandor. The company said in most of its geographies, revenue was, "flat with a return to growth for the first time in the last two years." Systems integration revenue for Atos was down 4.7 percent.


Capgemini revenue for 2010 was up 3.9 percent over 2009, to approximately $12 billion. Consulting Services, Technology Services and Local Professional Services reported average growth of 11 percent in bookings on the fourth quarter of 2009. Capgemini forecasts reported revenue growth of between 9 and 10 percent for 2011.


CDW reported record sales of $8.801 billion during 2010, up 22.9 percent year-over-year. Total sales in the fourth quarter of 2010 were $2.269 billion compared with $1.964 billion in the fourth quarter of 2009, an increase of 15.5 percent. Average daily sales in the fourth quarter of 2010 were $36.0 million compared with $31.2 million in the fourth quarter of 2009, also representing a 15.5 percent increase.

Cerner Corp.

Cerner Corp. reported fourth quarter revenue of $500.2 million, up 7 percent compared with $466.3 million in the year-ago period. Full year 2010 revenue was $1.85 billion, up 11 percent compared with 2009 revenue of $1.67 billion.

Bookings in the fourth quarter of 2010 were $626.2 million, second only to the all-time high level of $680.4 million in the fourth quarter of 2009. Full year 2010 bookings were a record $1.99 billion, up 9 percent compared to 2009 bookings of $1.83 billion.


CIBER saw fourth-quarter and full-year sales rise, but still reported net losses for both periods. Fourth-quarter revenue was $263.6 million, up from $249.6 million in the same period of 2009. However, the company saw a fourth-quarter net loss of $3.3 million compared with a net gain of $2.5 million in the prior period.

For the full year, the results were similar: For the 12 months ending in December 2010, revenue was $1.03 billion compared with $992.8 million in 2009. The 2010 net loss was $77.2 million compared with a gain of $14.96 million in 2009.


Hewlett-Packard reported an increase in profit for the first quarter of its 2011 fiscal year but sales were down due to weakness in its PC and services divisions. Revenue from HP's services division declined two percent from last year to $8.6 billion. Although HP profited from bigger, long-term deals, short-term contracts for IT outsourcing and application services fared poorly, CEO Leo Apotheker said in a conference call to shareholders. Overall, revenue was up four percent from last year, to $32.30 billion, a figure lower than the $32.96 billion that analysts had been expecting.

Insight Enterprises

Insight's revenue for the fourth quarter of 2010 compared with the fourth quarter of 2009 rose 14 percent, to $1.3 billion. For the full year, sales increased 16 percent, to $4.8 billion. Overall, product sales were up, while services were lower. In North America, net sales were $915.2 million for the fourth quarter of 2010, up 17 percent from the fourth quarter of 2009. Net sales of hardware and software increased 21 percent and 16 percent, respectively, year over year, while net sales in the services category declined 10 percent year to year.