News

Siebel income drop eclipsed by Microsoft speculation

E-business software maker Siebel Systems missed analyst forecasts and posted a sharp income drop for its third quarter, but upstaged that news late yesterday by confirming that it will make a major announcement on Monday in conjunction with Microsoft.

Bill Gates is scheduled to deliver a keynote address at Siebel's Worldwide User Week in Los Angeles, prompting speculation among analysts that the two companies are to tighten their ties.

Credit Suisse First Boston's research team issued a report this week speculating that Microsoft could announce a small minority investment in Siebel.

Siebel chairman and chief executive officer Tom Siebel said: "Microsoft is not buying Siebel. They are not making an investment. We can take that out of the speculation." he said. However, he pledged that the announcement would be a dramatic one.

Analysts have predicted a deep technology partnership between the companies, with CSFB forecasting that Siebel will spurn Java and commit exclusively to Microsoft's .net technology.

Siebel's net income from operations was $13.1m for the quarter, a 63% decrease from last year's $35.2m third-quarter net income.

That net income figure excludes a $109.4m restructuring charge and a one-time charge related to a stock-options settlement. Including those costs, Siebel had a net loss for the quarter of $92.1m.

Revenue for the quarter also declined, to $357.2m, down 18% year on year.

Siebel labelled its performance during the quarter "breathtakingly bad", although it admitted it had more to do with flawed sales execution than the poor economy.

As promised at the end of its second quarter, Siebel cut 1,100 positions during the third quarter, nearly half in its sales and marketing department. No further headcount reductions are coming.

Email Alerts

Register now to receive ComputerWeekly.com IT-related news, guides and more, delivered to your inbox.
By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy
 

COMMENTS powered by Disqus  //  Commenting policy