Longer Sales Cycles Hurt WebEx

The San Jose, Calif., Web conferencing company lowers its guidance as enterprise customers delay decisions because of the economy and war.

The airlines want $4 billion in federal aid to stave off bankruptcies. Since no one is flying, online conferencing must be booming right?

Not according to WebEx Communications . The San Jose, Calif., company is warning that revenues for the first quarter and fiscal 2003 would miss forecasts.

"We continue to face challenges due to a weak economic environment and the conflict in Iraq, causing longer than anticipated sales cycles, especially among enterprise customers," WebEx CEO Subrah Iyar said this morning.

For the first quarter, revenues will be approximately $42 million, 3.5 percent lower than expected. Net income, excluding equity-based compensation costs, will be approximately 11 cents per diluted share, consistent with prior guidance.

For 2003, WebEx expects revenues of $180 million to $190 million, down from previous guidance of $200 million. Earnings per share, projected to 45 cents to 50 cents per share, compared to earlier estimates of 50 cents to 55 cents.

WebEx offers a range of products and services that allows applications and data sharing, live video conferencing, and integrated teleconferencing.

Its products are aimed at many departments within a company including sales and markeing, customer service and training and human resources. Last week, the company signed a deal with Precise Software for sales and training services.

WebEx will announce its final first quarter financial results and discuss additional details about the business climate after market's close on April 17.

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