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To: Venkie who wrote (7275)	4/24/2002 3:02:27 PM
From: stockman_scott	Respond to of 13815

Stable Ariba 'Bucking the Trend' in B2B By Ronna Abramson Staff Reporter 04/24/2002 01:50 PM EDT Ariba (ARBA:Nasdaq - news - commentary - research - analysis) shares rallied Wednesday after the software company slashed its second-quarter loss despite a 37% revenue drop. The once highflying business-to-business software maker broke even on a pro forma basis in the second quarter, a quarter earlier than forecast, on the strength of new products. But the company said it expects fiscal third-quarter results to remain flat sequentially. Shares of Ariba rose 60 cents, or 20%, to $3.59. Mountain View, Calif.-based Ariba reported a second-quarter net loss of $154.8 million, or 60 cents a share. That compares to a loss of $1.84 billion, or $7.60 a share, in the same period a year ago, when the company incurred a $1.43 billion impairment charge on intangible assets and equity investments. Ariba said revenue in the second quarter, which ended March 31, fell to $57.2 million from $90.7 million a year earlier. Sequentially, revenue rose from $55.3 million in the first quarter. Ariba posted a pro forma profit of $1.1 million, breaking even before items, compared with a loss of $48.3 million, or 20 cents a share, a year ago. Wall Street was expecting the company to lose a penny a share on revenue of $55 million in the second quarter, according to Thomson Financial/First Call. In January, Ariba said it could break even on a pro forma basis in the June quarter. That was what Wall Street was expecting, according to Thomson Financial/First Call. On a conference call Wednesday, Ariba executives said the company expects to post sequentially flat earnings and revenue in the third quarter, which ends in June. Analysts were expecting the company to bring in $58 million in revenue in the third quarter. CEO Bob Calderoni, at the company's helm for seven months, said Ariba has turned the stability corner with its second-quarter results, portraying the company as a "turnaround story." Calderoni pointed out that cash dropped only $2 million, to $269 million on March 31. But Ariba is not out of the woods yet. "The corner they've turned is from sliding revenue to now stabilizing," said Jon Ekoniak, an analyst with U.S. Bancorp Piper Jaffray, who has a market perform rating on Ariba. "That definitely has to be commended because there are other organizations that have not done that, especially in this environment," Ekoniak added, referring to struggling B2B competitor Commerce One (CMRC:Nasdaq - news - commentary - research - analysis). The next step is for Ariba to show revenue growth. Achieving that goal will be a function of the economic environment and the company's position against such formidable competitors as Oracle (ORCL:Nasdaq - news - commentary - research - analysis), SAP (SAP:NYSE - news - commentary - research - analysis) and PeopleSoft (PSFT:Nasdaq - news - commentary - research - analysis) when the economy improves, Ekoniak said. His firm hasn't done any banking business with Ariba. Ariba's shares have plummeted from $183 in March 2000 as the company's growth fizzled along with the rest of the dot-com buzz. Ariba's market for procurement software, which allows companies to buy office supplies over the Internet, slowed dramatically, forcing the company to restructure. On Wednesday, Calderoni said more than one-third of sales came from new products, including a spend management suite introduced in the quarter. In an interview after the company's conference call, Calderoni added, "Stability is not growth, but in this market, stability is truly bucking the trend."