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To: techanalyst1 who wrote (12800)	7/18/2002 12:47:34 PM
From: stockman_scott	Read Replies (1) \| Respond to of 57684

Siebel Systems Shares Sink to 3-Year Low Thu Jul 18, 11:17 AM ET NEW YORK (Reuters) - Shares of Siebel Systems Inc. sank to a three-year low on Thursday, the morning after the software maker said second-quarter net profit fell 61 percent and said business would stay weak in the second half. Shares of Siebel sank as low as $9.59, and by mid-morning were trading at $9.71, off $2.04, or more than 17 percent, among the biggest net and percent losers on the Nasdaq. San Mateo, California-based Siebel, the No. 1 maker of customer service and sales software, also dragged down the stocks of its rivals. PeopleSoft Inc. was down 5 percent, or 81 cents to $14.82. J.D. Edwards & Co. was off 4 percent, or 38 cents, to $9.11. "Siebel was considered one of the better executing names with a much broader product suite and installed base," Credit Suisse First Boston analyst Brent Thill said. "For them to have the issues that they're having ... suggests that the whole application segment is going through a pretty broad transition" Thill slashed his price target on the stock to $15 from $26. He lowered his outlook for Siebel's 2002 earnings to 28 cents a share from 44 cents. For 2003, he now expects the company to earn 26 cents a share instead of 50 cents a share. Similarly he reduced his revenue outlook to $1.56 billion from $1.83 billion in 2002 and to $1.36 billion from $1.91 billion for next year. After the market closed on Wednesday, Siebel reported the 61 percent drop in second-quarter earnings and gave grim projections for the remainder of the year. It said it would cut more than 1,100 jobs, or about 16 percent of its staff, to bring expenses more in line with revenue. JP Morgan analyst Adam Holt said Siebel's grim outlook for the next two quarters, was particularly damaging to PeopleSoft, which reports its financial results Thursday evening. J.D. Edwards reported its fiscal second-quarter results in May, a month after its quarter closed. Goldman Sachs analyst Rick Sherlund cut his rating on the stock to "market performer" from "recommended list." Holt initiated coverage of Siebel with a "market performer" rating and set a third-quarter profit outlook of 6 cents a share on $362 million in revenue. For the year, Holt said he expects Siebel to earn 33 cents a share on revenue of $1.6 billion. "Given the potential for sequentially down license revenue in the third quarter and the limited visibility on the fourth quarter, we believe it is best to be cautious on Siebel in the near term," Holt wrote in a research note. Sherlund maintained his estimate of 35 cents a share for Siebel's 2002 earnings, saying the workforce cuts will offset lower revenues. He reduced his 2003 estimate to profits of 37 cents a share, down from his prior outlook of 40 cents a share. "The shares may likely show some additional near-term weakness, but this is our fourth estimate cut in the last three months so it is likely that much of this bad news has already been captured by the stock price decline over the past quarter," Sherlund wrote in a research note.