Siebel 4Q Profits Up, Revenue Down

The leading provider of CRM software Wednesday reported total fourth-quarter revenue of $366.7 million, a 7 percent drop from $394.7 million for the same quarter last year. Net income for the quarter was $41.5 million, or 8 cents a share, compared with a loss of $38 million in the year-ago quarter.

License revenue--which financial analysts consider a leading indicator of business momentum--dropped 4.5 percent to $150.3 million from $157.4 million. The final results beat the preliminary results announced Jan. 5. Then the San Mateo, Calif.-based company said it expected $365 million in total revenue and $150 million in license revenue for the quarter.

Siebel also saw annual revenue drop to $1.4 billion, down from $1.6 billion in 2002. It posted a net loss of $3.4 million for the year, compared with a net loss of $36 million in 2002. Most of that boost to its annual results occurred in the fourth quarter, when the company's net income rose to $41.5 million, up dramatically from a loss of $38 million in fourth quarter the previous year.

"In the fourth quarter, we saw a significantly improved IT environment, and we saw improvements across the board," said Tom Siebel, chairman and CEO of the company. He declined to speculate whether that improvement would continue for the next few quarters.

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Siebel's top executive surprised analysts by saying that its analytics software is now the company's second-largest product line, after CRM.

He also briefly described the company's newest acquisition, Ineto Services, as a "close friend" of the company that it's known for years. Siebel on Wednesday said it acquired Ineto, which hosts call-center infrastructure software, for $5 million in cash. Ineto's telephony features will be incorporated into Siebel's software-as-service, CRM OnDemand. The company said income from the service, which went live in December, was not material.

The market gave a tepid response to Siebel's results, with stock prices rising 28 cents, or nearly 2 percent, in after-hours trading.