Siebel Earnings Slip Again In Second Quarter

Siebel Systems

For its second quarter ended June 30, the company reported net income of $29.8 million, or 6 cents per share, compared with $76.6 million, or 15 cents per share, for the year-ago period. The consensus estimate had been earnings of 9 cents per share.

Revenue for the quarter was $405.6 million, vs. $560.2 million for the corresponding quarter last year.

The company's response to continued paltry IT spending will be to tighten its belt and reduce its current head count 15 percent to 6,000 from 7,164, said Chairman and CEO Tom Siebel.

About half of the cuts will be done by the end of the third quarter, said CFO Ken Goldman.

"In this environment, it would be imprudent for us to do anything but be subdued in our outlook going forward," Siebel told analysts on the company's earnings call. "It's difficult to express how weak [the general environment for information technology is in Europe, in Asia and in the United states. Tech vendors are not making any significant sales, the deals are smaller, companies are not spending and forecast deals continue to move out of the quarter."

To further dampen spirits, Siebel said he sees no reason to expect positive change in the situation over the next two quarters.

Some analysts were irked that the company had not preannounced the disappointing results. Siebel said there was no reason to do so. "We're not aware of any published guidelines in that area. . . . But we have financial results reviewed by accounting and legal experts and, as in previous quarters, they advised us that preannouncement would be inappropriate," he said.