To print: Click here or Select File and then Print from your browser's menu

This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://software.silicon.com/applications/0,39024653,10004994,00.htm

Siebel misses quarter forecast
Things aren't so rosy after all…

By Reuters Reuters

Published: Friday 04 July 2003

Business-software maker Siebel Systems on Thursday said it expected second-quarter earnings to miss Wall Street estimates, because customers have delayed making purchasing decisions due to the uncertain economic climate.

Siebel Systems, the No. 1 maker of software to manage customer service and sales activities, also announced a restructuring, including unspecified job cuts, beginning in the third quarter to boost operating margins and profitability.

"Overall, the business environment for information technology remains weak," Siebel Systems founder and chief executive Tom Siebel told analysts in a conference call. "Global economic conditions continue to be our biggest challenge due to uncertainty of our customers about their own businesses. Capital spending appears to be flat."

However, Oracle posted modestly strong results and PeopleSoft said its results would be stronger than expected, helped by a new programme that would refund customers two- to five-times the value of their software contracts if the company is sold.

Tom Siebel said the battle by PeopleSoft to avoid a hostile takeover by Oracle was adding to customer fear and uncertainty, leading some to delay software purchases.

Siebel Systems said it sees earnings per share of 2 cents for the quarter on revenue between $330m and $334m. Analysts polled by First Call were looking for second-quarter earnings of 3 cents a share on sales of $376.7m.

In April, the San Mateo, California, company had forecast a profit of 2 cents to 4 cents a share on sales of $340m to $360m.

Second-quarter software licence sales, a key gauge of future growth, are expected to be $110m, down from the previous projection of $120m to $140m, the company said.

Siebel will announce second-quarter results on 22 July.

Tom Siebel said that until recently the company had believed it could meet or exceed its estimates, but about $100m worth of opportunities the company had been working on in the last two weeks did not close. He said $90m of that total remains active, while $10m was cancelled, postponed indefinitely or lost to competitors.

Siebel called it a cyclical issue and not a shift in demand. His company's sales have been among the hardest hit because of the slowdown in spending.