Wednesday, July 21, 2004 8:59:05 PM
By DAVID BANK
Staff Reporter of THE WALL STREET JOURNAL
July 22, 2004
Siebel Systems Inc. said net income in the second quarter fell nearly 16% from a year earlier and revenue declined 10% as major customers delayed purchases of the company's sales-force automation software. The results were in line with preliminary results the company announced earlier this month.
"We did not perform very well in the second quarter -- period," Siebel's new chief executive, J. Michael Lawrie, said in a conference call.
Siebel's results come as the company faces increased competition from companies, such as Salesforce.com Inc., that offer "customer relationship management" software as a Web-based service. But Salesforce.com, which staged a successful initial public offering this month, issued a forecast for revenue in its first quarter as a public company that fell below what some analysts had expected, causing its shares to drop sharply.
Siebel, based in San Mateo, Calif., reported net income of $8.2 million, or two cents a share, on revenue of $301.1 million. That compares with year-earlier earnings of $9.8 million, or two cents a share, on revenue of $333.3 million. For the current third quarter, the company forecast earnings of between two cents and six cents a share on revenue of between $295 million and $330 million. The company said it expects to record a restructuring charge of between $10 million and $15 million.
That move reflects the challenge from Salesforce.com, which said at a meeting for Wall Street analysts that it had added 14,000 subscribers in May and June. But shares of the company, based in San Francisco, plunged after Chief Financial Officer Steve Cakebread said the company expected to break even or earn up to three cents a share in the year ending Jan. 31, 2005. In 4 p.m. composite trading yesterday on the New York Stock Exchange, Salesforce.com was at $11.70, off $4.36, or 27%.
In 4 p.m. trading yesterday on the Nasdaq Stock Market, Siebel was at $7.74, of 31 cents, or 3.9%. The earnings report came after the close of trading. In after-hours trading, Siebel's shares were quoted higher, at $8.05.
Write to David Bank at david.bank@wsj.com
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