Software licence revenues that tumbled by over a third combined with cost cutting expenses were enough to drive Siebel further into the red for its fourth quarter.
Including a $95.9 million restructuring charge, the fourth-quarter net loss was $38 million, compared with a year-earlier net profit of $65.9 million. Revenues fell to $394.7 million from $487.8 million as software license revenues dropped 37 per cent to $157.4 million. In contrast, operating expenses grew nearly 26 per cent year-on-year to $325.9 million.
Quarter on quarter software sales did pick up by 24 per cent. Nonetheless the company was cledarly unhappy with its performance. "This is not a position we expect to fill," admitted company founder and Chief Executive Tom Siebel.
Paul Wahl, president and chief operation officer, appears to have taken the blame for the performance and will leave the company at the end of the current quarter, although the company insists Wahl told Siebel a year ago that he wanted to retire. The people who reported to Wahl will now report direct to Siebel.
For 2003, Siebel predicts software license revenues and total revenues will grow 5 per cent from $700.3 million and $1.6 million respectively. "I believe that in 2003 and 2004, we will grow faster than any other major application software company," ge said.
The company also announced it has cancelled nearly 26 million stock options worth more than $56 million that were granted to Siebel. The company said it had canceled the options because it was concerned about diluting the value of its stock for other shareholders.
The canceled options represent all options granted to Siebel over the last four years, reducing Siebel's stake in the company from 13.5 per cent to 10.7 per cent. Siebel requested last June that the options be canceled, according to the company’s Securities and Exchange Commission (SEC) filing.
The company still faces a lawsuit brought by the Teachers' Retirement System of Louisiana last year, alleging Siebel "knowingly certified inaccurate financial results" by failing to record expenses for options awarded to him and Wahl that were granted below the market price.
Elsewhere PeopleSoft managed to keep net income stable despite a drop in revenues from $539.6 million a year ago to $512.2 million this year. Net income totaled $57.4 million compared with $57.7 million during 2001's corresponding period.