Siebel Reports 20% 1Q Sales Drop

Blaming the harsh economic environment, Siebel Systems posted a drop in both sales and earning for its first quarter. For its quarter ended March 31, the CRM leader earned $64.6 million, or 12 cents per share, down 16 percent form the year-ago quarter. Despite the slide in year over year earnings, these results met most analysts' expectations, according to Thomson Financial First Call estimates. Revenue for the three-month period came in at $477.8 million, a 20 percent drop from $598.8 million in sales in the same quarter last year. Specifically, licensing revenue for the first quarter was flat with its fourth quarter of 2001 and down 27 percent from the March period a year ago. Siebel is not alone. Recently rival PeopleSoft warned Wall street that its licensing revenue for its March quarter would be $30 million to $35 million lower than the $160 million analysts were expecting. PeopleSoft is expected to officially post its results on April 25. Siebel Chairman and Chief Executive Tom Siebel blamed the tough economic environment and customers delaying purchasing decisions for the revenue decline. However, he said the CRM market is still a growth area. Following the news, some financial investment banking firms including Morgan stanley lowered their stock rating on Siebel.