Siebel's Q1 report aims to soften the blow
- 23 April, 2002 13:50
Siebel Systems Australia has refuted suggestions the vendor skewed its latest earnings results to soften the blow of negative income growth in the first quarter of this year compared to the same quarter a year ago.
Net income for the US e-business software maker dropped 16 per cent in Q1 to $US64.6 million compared to $US76.9 million in the same quarter a year ago.
Licence revenue fell almost 27 per cent in the first quarter this year from the year-ago period, sliding from $US335.1 million to $US246 million.
However, Siebel chief executive Tom Siebel called the results "solid" in a climate that was far worse than anyone expected.
But in what appears an attempt to downplay a 16 per cent slide in net income over the quarter to March 30, 2002, the company did not report the drop in net income between fiscal years, defying convention by reporting instead results between consecutive quarters. In a media release last week, Siebel said net income in the first quarter of 2002 was $US64.6 million compared with $65.9 million in the fourth quarter of 2001.
By presenting consecutive quarters instead of the usual method of comparing revenue against those in the same quarter a year ago, Interactive Knowledge Online chief executive and industry analyst Aseem Prakash said Siebel was providing an unconventional benchmark for its latest results.
"It wants to create a positive spin on negative results," he said, unsurprised such tactics were used after a "very bad 2001" for enterprise software players.
Siebel Australia refused to comment on suggestions the company was engaging in creative financial reporting to save face, nor would it discuss revenue results for Australia.
With discretionary IT spending flat in a volatile market -- compounded by the impact of September 11 -- market analyst Gartner said these conditions were stalling CRM projects in the corporate sector and also making it hard for companies like Siebel to start preliminary work on deployments.
Prakash attributed the drop in Siebel's licensing revenues to a market already overloaded with "a lot of information technology", which he said limited Siebel's scope to sell software licences to new customers.
Siebel's first-quarter results showed a decline in earnings that matched Wall Street's projections, but a sharper fall in revenue than expected. However, given the softness in the market for the kind of enterprise software the company makes, analysts said they were relieved the results weren't weaker.
US analysts suggested growing competition from Oracle, SAP, PeopleSoft and Salesforce.com also drove Siebel's lacklustre financial results this first quarter.