Ariba, Commerce One Report Big Losses Amid Tough Business-to-Business Market
By LEE GOMES
Staff Reporter of THE WALL STREET JOURNAL
Ariba Inc. and Commerce One Inc., the two leading providers of business- to-business software and services over the Internet, reported steep quarterly losses along with a continuing tough market.
Ariba also announced the departure of Larry Mueller, its chief executive officer, who resigned unexpectedly. The Sunnyvale, Calif., company said Mr. Mueller, who had been at the company for two years, left to pursue other interests. Mr. Mueller couldn't be reached for comment.
Business as Usual?:
Ariba Chairman and Interim CEO Keith Krach says former CEO Larry Mueller left the company "to pursue other interests" and does not explain further. He says there is nothing unusual going on at the company. He says Ariba is not in acquisition talks with any other company.
His duties will be assumed by Keith Krach, Ariba's chairman, pending the selection of a successor.
Ariba and Commerce One have been struggling with the same overall weakness that is hurting most tech companies. The two have an extra burden, in that the once-booming business-to-business sector has been especially hard hit, in large part because companies haven't been able to deliver on the elaborate promises made for the technology at the height of the Internet bubble. B-to-B products are designed to allow companies to use the Internet to run their business.
Shares in both companies have lost more than 95% of their value from their peaks, reached early last year.
In their statements, both companies said they continued to be in a difficult selling environment, and both said they were taking steps, such as cutting costs, to keep expenses in line. Neither made any predictions about when a turnaround might occur.
B-to-B Software Firm Ariba Names Larry Mueller CEO (May 1)
For the third quarter ended June 30, Ariba had a loss of $273.5 million, or $1.10 a share, compared with a loss of $317.2 million, or $1.45 a share, a year earlier. Excluding a number of special charges, including some related to the layoff of a third of its staff in April, Ariba's loss was $26.1 million, or 10 cents a share, compared with the 12-cent-a-share loss that analysts had expected.
Sales were $85.3 million, up 6% from a year earlier.
Commerce One, Pleasanton, Calif., had a loss of $2.06 billion, or $9.02 a share, compared with a loss of $43.1 million, or 28 cents a share, a year earlier. Most of those losses were due to a number of one-time charges, including $1.7 billion for what the company said in a statement was the "impairment of intangible assets." Without those special charges, the company's loss was $70.2 million, or 31 cents a share, 10 cents wider than analysts had expected. Sales were $101.3 million, up 61% from a year ago.
Earlier this month, Commerce One warned that revenue would fall below its previous projections because big corporations that use its products were curbing technology spending. At the same time, it received a $222 million injection from SAP AG, the German business-software maker that develops software with Commerce One. That investment increased SAP's stake in Commerce One to 20% from about 5%.
Write to Lee Gomes at lee.gomes@wsj.com |
