Sybase, PeopleSoft warn IT spending is weak

Two enterprise software companies that released preliminary financial results Thursday said the weak economy put a damper on sales in the first quarter ended March 31.

Sybase Inc.'s revenue for the quarter will fall in the range of US$180 million to US$185 million, and its pro forma earnings per share will be between US$0.16 and US$0.20, versus analysts' consensus estimate of US$0.23 as reported by First Call/Thomson Financial, Sybase said in a statement. The pro forma figures exclude amortization of purchased intangibles, unearned stock-based compensation and restructuring costs. According to generally accepted accounting principles, earnings per share will fall in the range of US$0.12 to US$0.16, the company said.

Customers are putting purchases on hold due to growing economic uncertainty, especially in financial services and telecommunications, where Sybase does much of its business, the statement said. Business in the final week of the quarter was much weaker than expected. The weakness is concentrated in North America, according to the Dublin, California, company. The company will implement several measures to more aggressively manage its costs, the statement said.

Application software vendor PeopleSoft Inc., in Pleasanton, California, also said companies delayed purchases in the quarter. The environment for capital spending grew worse with concerns about the economic impact of the Iraq war, the company said in a statement.

PeopleSoft's preliminary financial results for the quarter cited revenue in the range of US$450 million to US$455 million, with US$370 million to US$375 million coming from services and US$80 million to US$85 million from licenses. The company's earnings per share are expected to be US$0.11 to US$0.12, the company said. PeopleSoft will release its final first-quarter results on April 22.

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