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To: Lizzie Tudor who wrote (14398)	10/18/2002 3:15:42 PM
From: stockman_scott	Respond to of 57684

Key Software Shares Off, Microsoft Climbs Friday October 18, 2:56 pm ET PALO ALTO, Calif. (Reuters) - Shares of some leading business software companies got slammed on Friday after posting disappointing quarterly earnings in contrast to Microsoft Corp.'s (NasdaqNM:MSFT - News) gravity-defying performance. While the majority of software companies saw year-over-year revenue and profits decline, Microsoft's sales surged and earnings more than doubled from a year ago thanks to a new software licensing plan. "Microsoft reported an exceptionally strong first-quarter distinguishing itself from the rest of the enterprise software vendors with a dramatic upside to margins, revenues and further balance sheet strengthening," Merrill Lynch analyst Chris Shilakes said in a research note to clients. Shares of Redmond, Washington-based Microsoft rose $1.83, or 3.6 percent, to $52.60 in afternoon trade on Nasdaq, a day after reporting earnings that sailed past analysts' expectations. But Shilakes cautioned: "While Microsoft may give a boost to stocks today, these results are not indicative of a turn in demand for software in general." Indeed, analysts were more likely to say the market appeared to be stabilizing -- or at least not getting worse -- rather than improving. To that end, software makers SAP AG (XETRA:SAPG.DE - News; NYSE:SAP - News), PeopleSoft Inc. (NasdaqNM:PSFT - News), Rational Software Corp. (NasdaqNM:RATL - News) and Mercury Interactive Corp. (NasdaqNM:MERQ - News) made share gains on Friday after meeting or beating Wall Street oft-lowered estimates. But the story was different for many other software shops. Check Point Software Technologies Inc. (NasdaqNM:CHKP - News) tumbled 18.4 percent, or $3.08, or $13.65 on the Nasdaq. The leading maker of security software that companies use to protect their corporate networks said its profits fell 16 percent and that it expected no growth in revenue in the current fourth quarter. Siebel Systems Inc. (NasdaqNM:SEBL - News) lost $1.07, or more 14.7 percent, at $6.23 after the No. 1 maker of software that helps track and forecast sales posted its first quarterly net loss in four years. For the second quarter in a row, Siebel missed its own forecasts and did not issue a warning. Looking ahead, Siebel told Wall Street to expect another hefty restructuring charge in the fourth quarter and gave inexact guidance that lagged analysts' expectations. Despite the company's statements to the contrary -- analysts said rivals SAP and PeopleSoft are making gains in the space that Siebel has long dominated. They also said Siebel is not performing as well as some competitors amid a brutal, two-year slump in corporate technology spending. "I'd say PeopleSoft's execution was better," said JMP Securities analyst Pat Walravens. On other fronts, manufacturing software maker i2 Technologies Inc. (NasdaqNM:ITWO - News) fell about 13 cents, or 18.6 percent, to 56 cents a share. The maker of purchasing and inventory management software posted another grim quarter of losses and saw its revenue fall about 43 percent from a year ago.