Siebel chief: IT recovery is 'fragile'

The software giant's income last year was hurt by the Iraq war, Tom Siebel notes as the company posts strong first-quarter earnings. He says he's cautiously optimisic about better days for the IT field.

Alorie Gilbert
Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.
2 min read
Software maker Siebel Systems posted a sixfold increase in first-quarter profits on Thursday, reporting higher software sales and lower expenses in the wake of a restructuring.

Overall revenue for the quarter, which ended March 31, dropped slightly as maintenance and service revenue waned.

Despite the improvement in the financial picture of the company--which Siebel had preannounced last week--Siebel CEO Tom Siebel sounded a sober note about the state of the information technology industry during a conference call.

"We feel cautiously optimistic," Siebel said. "It's very clear that this IT recovery we're seeing is fragile. There is still geopolitical dislocation; there is quite a bit of uncertainty out there."

The company has said the war in Iraq disrupted its business last year.

Siebel's first-quarter net income was $31.7 million, up from $4.6 million in the same quarter last year. Earnings per share were 6 cents, compared to a penny a year ago.

License revenue was $126.8 million, up 13 percent from the first quarter of 2003, while service and maintenance revenue dropped 8 percent to $202.5 million. Overall revenue was $329.3 million, down about 1 percent from the same quarter last year.

Generally, Siebel hit the high end of its financial guidance for the quarter and met analysts' expectations.

Siebel also reiterated its second-quarter financial targets: license revenue of $120 million to $140 million, maintenance revenue of $112 million to $118 million, service revenue of $95 million and $107 million. Siebel expects its total revenue to be $340 million to $365 million, with earnings per share between 6 and 8 cents. The quarter ends June 30.