SeeBeyond Warns on Third Quarter, Says Oracle Vet Will Chair Board

Former Oracle President Ray Lane will chair the software firm's board.
Author:
Publish date:

Updated from 5:05 p.m.

Integration software firm

SeeBeyond Technologies

(SBYN)

named Oracle alum and Silicon Valley veteran Ray Lane as chairman of its board of directors Wednesday, the company said, as it warned financial results would come in below par for the third quarter.

Lane, best known for his role as president of

Oracle

(ORCL) - Get Report

before a high-profile departure from the database giant in June 2000, has most recently worked at venture firm

Kleiner Perkins Caufield & Byers

. An assistant who answered the phone at the firm said Lane was still a partner at the firm.

A member of SeeBeyond's board for four years, Lane said in a statement that he felt now was the right time to take a larger role in the company.

SeeBeyond said Wednesday revenues for the third quarter would be between $41 million and $42 million, lower than the $50 million analysts were expecting, according to Thomson Financial First Call. The company expects to lose between six and seven cents a share in the quarter, excluding special charges. First Call consensus stands at a loss of six cents per share. It will take a $3.8 million restructuring charge. Including that charge, the company will see a loss of 11 to 12 cents per share.

For the fourth quarter, the company said it expects between $40 million and $42 million in revenue, and earnings between one and four cents per share. Analysts are currently expecting the company to break even on a per-share basis during the fourth quarter, according to Multex.com.

CEO Jim Demetriades, who will give up the chairman's spot to Lane, said the slowing of business after the terrorist attacks of Sept. 11 contributed to the company's weaker results. At the same time, he said he was surprised by the resilience of his firm's business from the middle of September on.

"Obviously, that week of the 11th was gone," Demetriades said. "But in the week after that week, we closed a lot of business. I thought (immediately after the 11th) that the quarter was going to be an unmitigated disaster, and it wasn't. We closed an amazing number of deals; we had 57 new customers. I was amazed by that number."

He said subsequent to the attacks, he thought his firm would be lucky to land 30 new deals. SeeBeyond was able to raise its numbers for the fourth quarter, Demetriades said, because he expects some of the deals that fell through in September to close during that period. Tighter cost controls will also help.

"What's great is that America stood up to the challenge on not freezing. A lot of CFOs did not sit on their hands. They made the decision to buy technology that would help their corporations, and that was something significantly different from Q2," Demetriades said.

Michael Marzolf, an analyst at U.S. Bancorp Piper Jaffray who rates SeeBeyond a buy, said the firm did a good job at a tough time. His firm has done no underwriting for SeeBeyond.

"I think their expectations now are that a fair number of the large deals that got pushed out of the quarter will resurface in the December quarter, and I think that's reasonable," says Marzolf. "What was impressive from my standpoint was pretty amazing controls around cost. They're just maniacal about weeding out the costs."

The appointment of Lane, the quintessential technology insider with a resume and a Rolodex that get calls returned, can't hurt the company either.

"Certainly, this is a company that has tripled its profile with the Street over the last three or four quarters," Marzolf says. "Bringing Ray to the helm as chairman is just another positive."