Siebel lowers quarterly revenue forecast

Business software maker says delayed customer deals will cause it to miss its current first-quarter sales and profit forecast.

Business software maker Siebel Systems said Tuesday that delayed customer deals will cause it to miss its current first-quarter sales and profit forecast, raising analyst concerns about the health of the software sector amid other profit warnings this week.

Siebel's stock fell about 8 percent in after-hours trade following the company's forecast for total first-quarter revenue of $297 million to $300 million--well below its Jan. 27 outlook for sales of $325 million to $345 million.

"You have (nine) companies warning in the past two days and so many diverse reasons as to what went wrong...It's a pretty major thing," said Friedman Billings Ramsey & Co. analyst Nitsan Hargil, after Siebel's warning.

"We were expecting slow and steady growth for the software sector...but the events of the last two days bring down our expectations for the remainder of the year," he added.

San Mateo, Calif.-based Siebel, the top maker of software that manages customer accounts, forecast a net loss, including an acquisition charge of $7 million to $9 million, or a net loss of 1 cent to 2 cents a share.

Investors also pushed down the stock of Siebel rival about 3 percent.

Siebel said it plans to take an $11 million charge for in-process research and development related to its acquisition of Edocs, an electronic billing and customer service software maker.

Siebel announced the $115 million acquisition in December.

Excluding the edocs' charge, the company expects net income of $2 million to $4 million, or break-even to 1 cent per share.

Siebel's stock dropped to $8.42 after closing at $9.15 on the Nasdaq.'s stock traded at $14.79 on the Inet electronic exchange after closing at $15.26 on the New York Stock Exchange.

On Jan. 27, Siebel forecast earnings per share, excluding items, of 5 cents to 6 cents. That forecast was in line with Wall Street estimates.

"We believed we had a sufficient number of deals in the pipeline to make our management guidance, but during the last several days of the quarter, a number of deals were delayed by customers," Siebel CEO Mike Lawrie said in a statement.

"This was a combination of poor execution on our part, exacerbated by a challenging economic and IT environment," Lawrie said. Other companies that warned about earnings on Monday included RSA Security, Mentor Graphics, a maker of electronic hardware and software used to design computer chips, and security management software maker NetIQ.

Story Copyright © 2005 Reuters Limited. All rights reserved.

Featured Video