Earnings roundup: Siebel, i2 and Nortel report

Once highflying customer relationship management (CRM) software maker Siebel Systems Inc. saw an 18 per cent plunge in third-quarter revenue year over year, along with a multimillion-dollar loss in income.

The San Mateo, Calif.-based company yesterday announced third-quarter revenue of US$357 million, down from US$437.9 million in the same quarter of 2001. Software license fees, a key indicator of a company’s health, also dropped, to US$126.8 million from US$193 million in the prior year. The net loss for the quarter, including a restructuring charge of US$109 million, was US$92 million, down from a profit of US$35 million in the same quarter of 2001.

The restructuring charge covered both a layoff and the consolidation of company facilities, Siebel said in a statement.

Ian Campbell, CEO of Nucleus Research Inc., a consulting firm in Wellesley, Mass., said the results are indicative of an overall slowdown in the CRM market, with Siebel, the leader, clearly affected.

He also said part of Siebel’s woes arose from the difficulty of installing the company’s suite. “Companies are turning to applications that provide quick return on investment, as opposed to large-scale applications that tend to have a longer payback period horizon for creating return on investment,” Campbell said.

Nucleus also recently publicized a report on Siebel that indicated users were having difficulty achieving ROI for their installations.

Meanwhile, ailing supply chain management software maker i2 Technologies Inc. reported a whopping net loss of US$199.1 million in the third quarter, but it believes it is approaching its goal of breaking even.

The loss includes a restructuring charge incurred during the quarter. Dallas-based i2 reported total revenue of US$115 million yesterday, compared with US$201 million in the third quarter of last year. The company also took a pounding in its software license revenue, which was US$30 million during the just-completed quarter, down from US$68 million in the third quarter of 2001.

In a statement, i2 Chairman and CEO Sanjiv Sidhu said, “We made significant progress toward our goals in the third quarter. I2 improved execution across many areas of the business including sales, consulting, product development, customer satisfaction, working with our partners and product quality. We estimate that our adjusted total operating expenses for the fourth quarter will be between US$120 [million] and US$125 million, which should bring us much closer to our goal of reaching operating break-even, in spite of a sluggish economy that limits forward revenue visibility.”

I2 also claimed that 65 customers went live this quarter with its products.

Also reporting quarterly earnings yesterday was Nortel Networks Corp., which posted a net loss of US$1.8 billion for its fiscal third quarter and said revenue declined from a year earlier in each of its main product sectors.

The deficit for the quarter that ended Sept. 30 translated into a net loss of US$0.42 per common share, the company said in a statement. That’s an improvement over the same period last year, when the Brampton, Ont., network equipment vendor reported a loss of US$3.47 billion, or US$1.08 per common share.

Revenue for the quarter was US$2.36 billion, down from US$3.69 billion in the third quarter of fiscal 2001, the company said.

Like other network equipment vendors, Nortel has battled declining revenue, due largely to a sharp slump in spending among service providers and large businesses. Earlier this month it announced a broad reorganization intended to help reduce costs and streamline its business.

Nortel expects to have sufficient cash to fund its business, manage its investments and meet its commitments to customers, Doug Beatty, Nortel’s chief financial officer, said in a statement. The company expects to have a cash balance of US$3 billion by the end of 2002, he said.

– With files from James Niccolai, IDG News Service

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