Briefs: May 30, 2005

CA 4Q EARNINGS PLUNGE

For the fourth quarter, the software vendor reported $17 million in net income, or 3 cents a share, compared with $89 million, or 5 cents a share, in the same period last year. Quarterly revenue was $910 million, up 7 percent from $850 million in the fourth quarter of 2004. Tugging at fourth-quarter profits were costs related to CA's settlement of a federal investigation into past accounting practices, compliance-related expenses and taxes resulting from "the planned repatriation of approximately $500 million" of profits made overseas, according to CA.

For fiscal year 2005, CA reported net income of $10 million and revenue of $3.5 billion. In fiscal 2004, the vendor reported $25 million in net income and revenue of $3.2 billion. In fiscal 2005, CA increased bookings from its indirect channel sales by 19 percent over the prior year.

Indirect sales for CA currently account for less than 10 percent of CA's overall sales, said John Swainson, president and CEO. Swainson said he believes CA can achieve as much as a 30/70 split between indirect and direct sales.

MICROSOFT POSTS NEW AVALON, INDIGO, INFOCARD BITS
Last week, Microsoft posted what it called release candidate for beta one of Indigo Web Services, Avalon presentation and Infocard digital identity management technologies.

Available from MSDN, the technologies will run on existing Windows XP and Windows Server 2003 operating systems, as well as the upcoming Longhorn version of Windows, Microsoft said.

This code drop adds new functionality over what was made available in the March Community Technical Preview of Avalon and Indigo, said Ari Bixhorn, Microsoft's lead product manager for Web Services.

Indigo now has peer-to-peer functions for multiparty messaging and whiteboarding. Avalon now enables developers to integrate audio and video into their own custom interfaces and also to load and run multiple videos simultaneously, he said.

INVESTORS FILE CLASS-ACTION SUIT AGAINST TIBCO SOFTWARE
A class-action lawsuit was filed last week against Tibco Software and certain Tibco executives on behalf of shareholders.

The complaint, filed in the United States District Court for the Northern District of California, alleges that Tibco executives intentionally made false and misleading statements about the health of the company's Staffware acquisition and Staffware's financial performance. In addition, the suit alleges that Tibco did not maintain an adequate system of internal financial, operational or disclosure controls to ensure the accuracy, completeness and veracity of its public statements and representations to investors.

NOVELL 2Q LOSS WIDENS
Novell reported a wider second-quarter loss than in the year-ago period, as license revenue dropped significantly and expenses increased.

Losses increased to $15.8 million compared with a loss of $15.4 million the same period last year. Excluding items such as restructuring, development expenses and long-term investment impairments, the company reported earnings of $1 million, or break-even per share.

Total revenue rose 1 percent to $297.1 million from $294 million.

Novell reported a significant drop in new software licenses—revenue from software licenses fell to $45.8 million from $60.3 million last year.

SIEBEL READIES RETENTION PLAN FOLLOWING ACQUISITION RUMORS
In an effort to keep its employees from leaving in the face of growing speculation the company is being acquired, Siebel Systems unveiled an employee-retention benefit program.

In a report filed last week with the Securities and Exchange Commission, Siebel outlined a plan under which eligible employees will receive certain severance benefits during the period that begins three months before a change of control and ends one year following a change of control. The plans cover involuntary terminations "without cause" and voluntary resignations "for good reason," according to the filing.

EUROPE, MIDDLE EAST RESULTS DRAG DOWN TECH DATA EARNINGS
Tech Data missed analysts' expectations in its second fiscal quarter due to lower-than-expected results from Europe, the Middle East and Africa, according to the distributor.

Tech Data earned $33.5 million, or 56 cents per share, on $5.08 billion in revenue for the second fiscal quarter ended April 30. The results compare with $34.7 million in net income, or 59 cents per share, on $4.82 billion in revenue for the same period last year. Wall Street had expected earnings of 60 cents per share, according to Thomson Financial/First Call.

"We planned for more revenue to materialize in Europe. We saw a bigger slowdown than we expected," said Tech Data Chairman and CEO Steve Raymund, adding that the Euro and soaring price of oil in the quarter were big factors. "That put a double-whammy on a relatively fragile European economy. The U.S. historically has been more flexible and able to adjust to shocks to the system."

Tech Data plans to restructure its EMEA region, which likely will include job cuts, but there should be none in the United States, Raymund said.