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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (54395)	8/13/2002 1:25:37 AM
From: Dealer	Read Replies (1) \| Respond to of 65232

SEBL--Siebel Systems' Swap Sales Jump to 18% of 2nd-Quarter Software Revenue By Marcelo Prince Dow Jones Newswires NEW YORK -- Siebel Systems (NasdaqNM:SEBL - News) Inc.'s revenue from so-called swap deals with its suppliers nearly tripled in the June-ended quarter, even as the company shocked investors with a 41% drop in total software sales. ADVERTISEMENT The San Mateo, Calif., company collected $30.7 million of software-license revenue from suppliers with which the company also purchased products "at or about the same time," documents filed Friday with the Securities & Exchange Commission show. That represents 18% of Siebel's $170.1 million second-quarter license revenue -- the highest percentage since the company began disclosing this information. In the year-earlier period, swaps were $12.2 million, or 4%, of Siebel's $286.8 million in license revenue. The amount of swaps in the most recent quarter is "off the charts compared to what we have seen in previous quarters," said Patrick Walravens, an analyst at JMP Securities in San Francisco. He rates Siebel at market perform and doesn't own the stock. "Revenue was hard to come by last quarter" and it appears Siebel squeezed its suppliers or partners to reach for Wall Street's targets. Swaps, also called barter deals, have come under increased scrutiny by investors and analysts recently. Critics say suppliers may make these purchases to retain their relationship with Siebel, not necessarily because they need more of its software. Critics also say swaps may lead some customers to pay inflated prices in an industry that typically sells its products at a discount. A Siebel spokesperson wasn't immediately available. Chief Executive Tom Siebel has defended his company's disclosure of what he calls "concurrent transactions" and questioned why other software vendors don't provide such information. The company stated in Friday's SEC filing that "these transactions are separately negotiated, settled in cash and recorded at terms the company considers to be arm's length." Chuck Phillips, an analyst at Morgan Stanley (NYSE:MWD - News), said Siebel's high percentage of swaps is a cause for concern and "may not be sustainable." Customers that aren't buying software to solve an immediate business problem are unlikely to have Siebel's products up and running within a year, making them unlikely candidates for repeat purchases, he said. Phillips assigns Siebel an equal-weight rating. The once fast-growing company is struggling with slack demand for its costly software, which is used to manage salespeople and call centers. Its June-quarter software sales were the lowest in 10 quarters. Last month, the company announced plans to dismiss 1,200 people, or 16% of its work force, and executives lowered expectations for the current quarter. They forecast software licenses would fall somewhere between $135 million to $170 million. At 4 p.m. EDT on the Nasdaq National Market, shares of Siebel Systems were down 10 cents, or 1.1%, at $8.70. The stock has fallen 69% so far this year, erasing more than $9 billion in shareholder wealth. By Marcelo Prince; Dow Jones Newswires; 201-938-5244; marcelo.prince@ dowjones.com

To: Dealer who wrote (54395)	8/13/2002 1:40:56 AM
From: RR	Respond to of 65232

Hi Dealer! I learned a long long time ago to never underestimate INTC. RR