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Bill Snyder
Shares of Siebel Systems(SEBL Quote) rose strongly Monday after the business software maker said sales in the just-closed third quarter will be stronger than expected.
The timing of the announcement couldn't have been better for newly anointed CEO J. Michael Lawrie, who kicked off the company's annual user convention in Los Angeles just hours after the news hit the wires. In recent trading, shares of the San Mateo, Calif., company gained $1.26, or 15.4%, to $9.45 on very heavy volume. The upside reaction was all the greater because several analysts said on Friday they were expecting Siebel to announce that it would undershoot its targets for the September quarter. The company expects sales to range from $315 million to $317 million, a sequential increase of 5%; the mean estimate of analysts polled by Thomson First Call was $305 million. The company said "it is comfortable" with Wall Street's earnings consensus of 4 cents a share. License revenues, a key metric of new business, will be $104 million or $105 million, a 10% sequential gain and well above analysts' estimates of about $96 million. Speaking to about 3,000 customers and employees on Monday morning, Lawrie gave a hint of his strategy to bring the company back on track, saying that Siebel will increasingly focus on business analytics software, customized applications and vertical markets, such as automobiles, telecom and energy. Looking every inch the former IBM (IBM Quote) executive that he is, Lawrie wore a blue suit, light blue shirt and dark tie. He alluded frankly to some of Siebel's well-known difficulties pleasing customers, saying, "We need to be easier to work with," noting that according to an internal survey, 41% of the company's customers polled expressed some dissatisfaction with their Siebel software, while about 48% said it met expectations, and 10% said it was better than expected.
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