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Front office firms post strong results

Leading front office software companies are on a roll, posting healthy fourth-quarter results driven by a growing market for their applications.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
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Kim Girard
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Leading front office software companies are on a roll, posting healthy fourth-quarter results driven by a growing market for their applications.

San Mateo, California-based Siebel Systems doubled earnings from a year ago, reporting net income of $19.9 million for the fourth quarter, or 20 cents per share. The earnings beat Wall Street analysts' estimates of 16 cents a share, according to First Call.

That compares to net income of $9.3 million or 10 cents a share a year earlier.

AMR Research in Boston predicts the market for front office software--provided by vendors including Siebel, Vantive, and Clarify--will reach $11.5 billion in the next four years, up from $1.2 billion last year. The software is used to manage marketing, sales force, and customer service departments.

Siebel's revenues rose to $123.2 million this quarter from $69.2 million a year ago.

The company reported fourth-quarter license fee revenues increased 72 percent compared to a year ago. Revenues from maintenance, consulting, and other services also jumped 97 percent from a year ago.

Excluding charges for acquiring Scopus Technologies in the second quarter of 1998 and several other deals, the company reported revenues of $391.5 million for the year, and $55.7 million in net income, or 56 cents a share.

Siebel's smaller rivals Clarify and Vantive also posted healthy quarters.

Clarify said net income for the fourth quarter was $3.5 million, or 15 cents a share. That compares to net income of $666,000, or 3 cents a share a year ago.

The San Jose, California-based company reported a 50-percent revenue jump for the quarter to $41.3 million from $27.5 million a year earlier.

For the year, Clarify reported net income of $7.3 million, or 32 cents per share, compared to net income of $3.9 million or 18 cents a share in fiscal 1997.

Santa Clara-based Vantive reported record revenue, but a profit decline.

The company posted net income for the fourth quarter of $2.2 million, or 8 cents per share.

That excludes a $1.2 million charge for the company's acquisition of the remaining minority interest in Wayfarer Communications. Earnings surpassed analysts expectations by a penny, according to First Call.

Vantive, which is now shifting the focus of its business back to call center applications, reported net income of $4.8 million, or 17 cents a share.

Fourth quarter revenues increased 26 percent to $47.4 million from $37.7 million a year ago.

For the year, revenues were $163.1 million, and net income, excluding charges, was $8 million, or 30 cents per share.

That compares to $117.3 million and net income, excluding charges, of $14.2 million or 52 cents a share in 1997.