Ariba 4th-Quarter Net Loss Widens, But Predicts Profit for Next Period
By Carl Corry, CBS.MarketWatch.com
Last Update: 2:09 PM ET Oct 19, 2000 NewsWatch
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MOUNTAIN VIEW, Calif. (CBS.MW) -- Shares of business-to-business software developer Ariba fell by as much as 12 percent Thursday as investors discounted the company's surprisingly positive break-even fourth quarter earnings report.
Ariba (ARBA: news, msgs), which was expected to show a loss of 5 cents a share according to analysts polled by First Call, posted a net loss for the quarter, excluding non-operating charges, of $1.1 million -- essentially breaking even on a per-share basis.
For the same period a year ago, the company recorded a net loss of $4.6 million, or 3 cents per share, excluding non-operating charges.
Ariba generated revenue of $134.9 million in the company's fiscal 2000 fourth quarter, up by 67 percent from the previous three months and by 687 percent from the same period last year.
However, as analyst Melissa Eisenstat of CIBC World Markets points out in a research report issued Thursday, questions remain about the strength of the B2B alliance between Ariba, I2 Technologies (ITWO: news, msgs) and IBM (IBM: news, msgs) designed to collaborate on e-commerce initiatives.
Unanswered questions
And Ariba's modest network revenue, largely derived from e-marketplace transaction fees, "is a little disconcerting with so many new markets online," Eisenstat said.
She noted that the $35.7 million the company generated in network and other services did not appear as strong as the growth in licensing revenue, which -- at $99.1 million -- were nearly $40 million more that she had forecast.
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10/20/2000 12:01:22 AM ET
Ariba gained some ground later in the session to $122 in recent trading, still down $5.06. The Merrill Lynch B2B Internet Holdrs rebounded to the positive side. The batch of shares that trade as a single issue were up 1.8 percent
Fiscal year 2000 revenue was $279 million, up 515 percent compared to the $45.4 million the company generated during fiscal 1999. Ariba's net loss for the full year excluding non-operating charges was $29.5 million, equating to a loss of 15 cents per share.
Chairman and chief executive officer Keith Krach attributed the company's better-than-expected quarter to its ability to get its customers' e-marketplaces up and running. He said the company is bringing about 20 customers live each month.
"Profitability is imminent," he said in a conference call with analysts and media, adding that Ariba was the first Internet B2B player to break even.
He said the company's bottom-line performance and record revenue validate the company's strategy as a platform and network services company.
The company said it expects to report profits of 2 to 3 cents a share in the first quarter of fiscal 2001 and 16 to 20 cents a share for the full year. |
