Tibco Software has downgraded its forecasts for the year after seeing "a large amount of potential fall out in the last few days of the quarter", indicating that the ongoing credit crunch may be hitting bank IT spending budgets.Shares in the California-based software house - which generates a quarter of its revenues from the financial services sector - dipped by 12 percent in after-hours trading after the company disclosed third quarter results well below analyst estimates.
The firm is projecting earnings of 4 cents to 5 cents a share for the quarter on total revenue of $133 million and license sales of $52 million. Analysts had been forecasting earnings of up to 7 cents a share.
Vivek Ranadive, chairman and chief executive officer, Tibco, says: "Although business was notably weak in financial services and government, the late change in business occurred in a variety of geographies and verticals and appears most related to unanticipated delays in deal-specific approval processes. Competitive losses were not a factor, so we do expect some of the business that fell out of the quarter to return in subsequent quarters.
In a client note, Jefferies & Co. analyst Katherine Egbert, said that the forecast pointed to a slow down in tech spending among banks.
She warns: "Although Tibco is a relatively small vendor, their third-quarter results could be a first glimpse into a potentially larger slowdown in financial services spending."
Others have described Tibco as "the canary in the coal mine" for bank IT spending, and warned of the potential knock-on effects to other firms reliant on financial services tech budgets.
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