By CNET Networks, 4 April 2003 09:43
NEWS PeopleSoft and Sybase said first-quarter earnings will fall below analysts' forecasts on Thursday, citing weaker-than-expected sales. The two companies are not alone in this tough IT spending environment. Last month, rival Oracle reported third-quarter financial results with a four per cent decline in new database software licences year over year. WebMethods and Interwoven also warned investors this week of earnings woes in the quarter ended 31 March. Sybase expects its first-quarter revenue to range between $180m and $185m. And pro forma earnings should be between 16 to 20 cents a share, the company said. The company had previously forecast revenue of $200m to $205m, 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 31 March. The company said that it expects to post first-quarter earnings of 11 cents to 12 cents per share on revenue between $450m to $455m. Analysts polled by First Call had expected the company to earn 14 cents per share, on average, on sales of approximately $483.6m. "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 licence revenue, a key measure of future growth, contributed $80m to $85m to sales for the quarter compared with the $125m to $135m it had expected. In the first quarter last year, PeopleSoft earned 14 cents per share on total sales of $483m, with licence revenue of $133m. Sybase is scheduled to post first-quarter results on 17 April. PeopleSoft is scheduled to do the same on 22 April. Dawn Kawamoto writes for News.com. News.com's Alorie Gilbert contributed to this report
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