Siebel exec sees 'challenging' environment for company

Computerworld - Analysts and shareholders have reacted negatively to comments yesterday from Siebel Systems Inc. Chief Financial Officer Ken Goldman in which he said the market outlook for the company's current quarter is just as "challenging" as its first quarter, which was its worst ever.
The company's stock was trading at $17.66 per share at the end of trading yesterday and was down to $14.86 per share as of midmorning after analysts issued warnings about the company's earnings based on Goldman's comments.
Speaking to a group of investors, Goldman was asked about cash flow. "That clearly depends on revenue," he said. "As long as our revenue continues to hang in, so to speak, then we can deliver the earnings."
Much depends on the environment in the market, he said, and "the environment is every bit as challenging, if not frankly more challenging this quarter as it was last quarter."
New York-based First Albany Cos. analyst Mark Murphy said today he isn't surprised by Goldman's comments. Murphy said he has been cutting his earnings estimates for the company for a while.
"The reason I have been doing that is a couple of things; in particular, the large-deal enterprise software environment remains quite weak," he said. Murphy also said the European IT market continues to be weak, which will hurt Siebel.
Jeff Nevins, an analyst at First Analysis Corp. in Chicago, agreed that Siebel will continue to have problems. Nevins said that if current trends continue, he wouldn't be surprised if the company is forced to embark on some cost-cutting measures.
Murphy also said Siebel's prospects might get better in the fourth quarter of this year because a lot of companies have put off IT spending. But he isn't going to issue any positive forecasts.
"I do not see the environment getting better in Q2 and Q3, and Q4 is a maybe," Murphy said.
Attempts to reach San Mateo, Calif.-based Siebel this morning for more information about Goldman's remarks were unsuccessful.