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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.

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.