April 3, 2003 4:36 PM PST
Sybase, PeopleSoft issue warnings
The two companies are not alone in this tough IT spending environment. Last month, rival Oracle reported third-quarter financial results with a 4 percent decline in new database software licenses year over year. WebMethods and Interwoven also warned investors this week of earnings woes in the quarter ended March 31.
Sybase expects its first-quarter revenue to range between $180 million and $185 million. And pro forma earnings should be between 16 to 20 cents a share, the company said.
The company had previously forecast revenue of $200 million to $205 million, according to analysts. Meanwhile, before the warning, Wall Street predicted pro forma earnings of 23 cents a share, according to First Call.
"Business in the final week of the quarter was much weaker than expected," Sybase CEO John Chen said in a statement. "We saw numerous transactions deferred to future quarters, as customers put IT purchases on hold with the increasing economic uncertainty."
He also said Sybase's focus on customers in the troubled telecommunications and financial services sectors hurt the company.
PeopleSoft cited the negative impact of war in Iraq on business purchasing as a main factor causing it to miss financial targets in the first quarter, ended March 31. The Pleasanton, Calif., company said Thursday that it expects to post first-quarter earnings of 11 cents to 12 cents per share on revenue between $450 million to $455 million.
Analysts polled by First Call had expected the company to earn 14 cents per share, on average, on sales of approximately $483.6 million.
"Obviously the environment for capital spending worsened in the first quarter with added concerns about the war and its impact on the already weakened economy," said Craig Conway, PeopleSoft president and CEO, in a statement. "The result was delays in corporate purchasing worldwide."
The company said that software license revenue, a key measure of future growth, contributed $80 million to $85 million to sales for the quarter compared with the $125 million to $135 million it had expected.
PeopleSoft, which competes with Oracle, SAP and Siebel Systems, sells software designed to automate corporate accounting, sales activities, inventory tracking and human resources tasks.
In the first quarter last year, PeopleSoft earned 14 cents per share on total sales of $483 million, with license revenue of $133 million.
Sybase is scheduled to post first-quarter results April 17. PeopleSoft is scheduled to do the same April 22.