Ariba ($43)Beats Estimates, Raises Forecasts
By Lisa Baertlein
PALO ALTO (Reuters) - Software maker Ariba Inc. (NasdaqNM:ARBA - news) on Thursday reported first-quarter results that beat Wall Street expectations and increased its guidance for the second quarter and fiscal year.
Ariba reported an operating profit of 5 cents per share. That handily beat the average Wall Street forecast for a profit of 2 cents per share, and the results made Ariba the first pure-play Internet business-to-business player to post a profit -- before noncash charges.
``Demand for Ariba e-commerce products and services continues to be strong as customers around the world are closely watching the bottom line and looking to realize immediate benefits,'' Keith Krach, Ariba's chief executive and chairman, said.
For the quarter ended Dec. 31, the Mountain View, Calif.-based company earned $14 million, excluding noncash charges, compared with a loss of $5.6 million in the year-ago quarter, when it lost 4 cents per share.
During the quarter, revenues climbed to $170.2 million, up 625 percent from $23.5 million a year ago.
The company's net loss was $347.6 million or $1.48 per share, expanding from a loss of $10.3 million or 7 cents per share in first quarter of 2000. Those results included noncash charges, the majority of which were related to acquisitions.
Based on its first-quarter operating results, the company boosted guidance for the second quarter and fiscal year 2001.
It forecast earnings of 6 cents per share on revenue in the range of $180 million to $185 million. The consensus estimate compiled by First Call/Thomson Financial had called for earnings of 4 cents per share on revenue of $178 million.
For fiscal 2001, Ariba forecast earnings of 25 cents to 26 cents per share on revenues of $780 million to $790 million. First Call's consensus estimate was for earnings of 18 cents per share on sales of $751 million.
Ariba shares, which were among the day's heaviest traded, closed $3-5/16 higher at $43-3/8.
The stock price dropped about $3 in after-hours trading -- a decline analysts attributed to the somewhat conservative earnings guidance from Ariba's new chief financial officer, Robert Calderoni. The stock rebounded to $43 after Calderoni told financial analysts that he was ``very bullish'' on the company's prospects.
Leader In Growing Market
``I feel real good about where they're at,'' Mark Verbeck, senior analyst at Epoch Partners in San Francisco, said.
While the company recently revealed that it had increased its reserves for doubtful accounts from $4 million to $13 million to cover dot-com failures -- it assured analysts that it generates more than 90 percent of its revenue from large corporations in the United States, Europe and Asia.
Company executives also said Ariba has plenty of cash -- $408 million -- and is prepared to roll out new technology that will help it grab a bigger share of its fast-growing, largely unpenetrated market.
Ariba company already has helped companies such as Cisco Systems Inc. (NasdaqNM:CSCO - news), Bristol-Myers Squibb Co. (NYSE:BMY - news) and FedEx Corp. (NYSE:FDX - news) save money by moving their purchasing process online, Krach told Reuters.
Only 20 percent of the companies that have revenues exceeding $1 billion have automated their purchasing. Those that have not will be making decisions within three years, Krach said.
``Global 2000 enterprises will be the most important catalyst to B2B adoption. They are the change agents of the new economy,'' Ariba's President Larry Mueller said during Thursday's conference call.
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