Sales Still Sluggish

Siebel Systems reported a second-quarter profit of $9.8 million on sales of $333.3 million, yet sales were 17.8 percent lower than those of the year-ago quarter. The company plans to lay off about 500 employees and consolidate offices, according to Siebel.

"The market is quite soft," said Tom Siebel, chairman and CEO of the San Mateo, Calif.-based company, in a conference call with analysts. "It does not appear that the IT economy is picking up, and as a result, we have made the decision to rework our operating plan for the remainder of 2003 and for 2004."

Proxim, a wireless networking vendor based in Sunnyvale, Calif., reported a loss of $48.7 million, or 40 cents per share, on sales of $34.8 million. The loss included charges of $12.5 million for layoffs and other restructuring charges.

About 100 Proxim employees are expected to be laid off, bringing the company's head count down to 330, said Frank Plastina, Proxim president and CEO. Plastina said the company is moving forward with a four-point plan that includes $30 million in new capital investments, layoffs and office consolidations in an effort to return to profitability by the end of the year.

Sun Microsystems' financial woes continued as it reported its fiscal fourth-quarter and year-end earnings for 2003. The fourth-quarter profit of $12 million was small consolation for the Santa Clara, Calif.-based vendor, which posted a net loss of $2.38 billion for the year, or 75 cents per share. That compares with a net loss of $587 million, or 18 cents per share, last year. Sales, too, were down 8.5 percent year over year, dropping to $11.43 billion from sales of $12.5 billion for fiscal 2002.

Sun Chairman, President and CEO Scott McNealy admitted he is not happy that Sun didn't grow its business in 2003, although returning to profitability,as Sun did in the third quarter of fiscal 2003,was heartening.

"I think very few companies were able to take the ride up and the ride down and still put billions and billions into the balance sheet," McNealy said. "This has us set up for whatever the economy [has in store]."

Storage vendors seemed to fare better in the quarter. Veritas, Mountain View, Calif., reported income of $49 million, or 11 cents per share, on record sales of $413 million for its second quarter ended June 30.

Carlsbad, Calif.-based Dot Hill reported revenue of $48.4 million for its second quarter ended June 30, compared with $11.2 million for the same quarter last year.

StorageTek, Louisville, Colo., reported second-quarter income of $30.1 million, or 27 cents per share, on sales of $527.3 million. That's up from income of $19.1 million, or 18 cents per share, on sales of $491.9 million for the same quarter last year.

Security vendor Symantec, Cupertino, Calif., reported income of $68 million, or 41 cents per share, for its fiscal first quarter, beating Wall Street estimates of 39 cents per share.

And despite a continued decline in channel sales, Computer Associates International reported income of $10 million, or 2 cents per share, for its fiscal first quarter ended June 30. That's up from a loss of $67 million, or 11 cents per share, for the same quarter last year.

Sanjay Kumar, chairman and CEO of the Islandia, N.Y.-based company, said while he anticipated a loss of 3 cents to 4 cents per share for the quarter, the revenue improvement was driven by a combination of higher overall revenue and lower total costs.

Better-than-expected earnings, however, didn't always translate into profits on Wall Street. Despite record second-quarter revenue, Lexmark found its shares tumbling to a five-month low following the printer manufacturer's warning that weak demand and pricing pressures would lead to low third-quarter results.

The Lexington, Ky.-based printer manufacturer reported income of $101.7 million, or 77 cents per share, on sales of $1.12 billion for its second quarter ended June 30. That's up from income of $89.1 million, or 67 cents per share, on sales of $1.05 billion for the same quarter last year.

Lexmark's stock dropped by more than $14 per share, or 19 percent, early last week after the company predicted third-quarter earnings of 63 cents to 73 cents per share.