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Siebel's improved revenue forecasts have raised hopes for the entire enterprise software sector in 2004. The Nasdaq index moved to a 52-week high on Monday, powered by growing confidence in all IT sectors. And while Siebel may not be heading for its past revenue levels just yet, the outlook for the company is once again positive.

Siebel said it saw a significantly improved business environment in Asia, Europe and the United States during Q4. This increased willingness to spend money has enabled Siebel to forecast that Q4 revenue will be around $365 million, with license revenue contributing approximately $150 million. In October it forecast that revenue would be in the range of $335-355 million and license revenue would be in the $120-140 million range.

With revenue up on expectations, Siebel is now looking for earnings per share about $0.08, compared with the previous forecast of $0.05 to $0.06. Though Siebel's coffers were drained by the cash acquisitions of UpShot and Motiva in the quarter, it added $40 million to its reserves and ended the year with cash and equivalents of $2.02 billion.

There remains the possibility that Siebel's figures are a blip, caused by a one-off seasonal improvement. However, the improvement has come across its entire product range and sectors badly hit by the downturn such as telecoms have been amongst its most enthusiastic customers.

A further insight into its thinking will come when Siebel releases the full figures later this month and reveals what it expects for the coming year. The stock was up 6.75% at $14.92 after its estimates were announced, suggesting that the market believes the company to be poised for a new era of growth.

To put the figures into perspective, Siebel's estimated fourth-quarter revenue is 8.2% down on the same period last year and 24.1% down on the $481.4 million it achieved in the fourth quarter of 2001.

The CRM market leader has at least come to terms that those days are over and the substantial improvement in its bottom line is the result of a restructuring and substantially reduced headcount.

At one time Siebel's entire future was in doubt, with rumors that it would be acquired by Microsoft. Now finally there are hopes that revenue may be moving upwards again, and with substantial reserves it can buy its way into new markets.

Source: Computerwire/Datamonitor

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