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Investors nonchalant towards s/w rev forecasts

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CIOL Bureau
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PALO ALTO, California: Several big software shops are standing by their latest forecasts, but investors are shrugging off the news, as nearly a month remains in the quarter and corporate demand for technology continues to remain weak. In better times, investors would scramble to buy shares when company executives reiterated guidance. But times have changed.



Already badly battered by falling stock prices, investors this week are taking a wait-and-see approach after Siebel Systems Inc., Check Point Software Technologies Ltd., Symantec Corp. and Veritas Software Corp. each said they are on track to meet expectations for the current quarter ended September.



That response came as no surprise to Prudential Securities software analyst John McPeake. "It's way too early to know what the quarter's going to look like," McPeake said. In the first two months of any quarter, software shops tend to get 40 percent of their total revenue. During the last month, they often bring in 60 percent, he said.



Of the companies mentioned above, only Siebel was making share-price gains. Standard & Poor's computer software index, a basket of software stocks, was down about 1 percent. When software makers issued guidance at the end of the June quarter, many analysts were quick to say the executives were conservative and they had given themselves easy targets to beat.



Siebel, the No. 1 seller of customer service software, and network security software maker Check Point each said it expected revenues to be down from the year-earlier third quarter -- but not all the news was bad. Storage management software maker Veritas and anti-virus software maker Symantec said they see earnings and revenues rising.



Symantec's growth recently has been helped by strong consumer sales. "The consumer is holding up the economy and it seems to be true for software too," McPeake said. Veritas' segment also is performing better than others in the sector, but McPeake again said time will tell if Veritas and other companies will hit their forecasts. "Don't get excited yet," he said.



© Reuters

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