UPDATE: Ariba Tops Expectations

SAN FRANCISCO (04/13/2000) - The business-to-business electronic-commerce software vendor Ariba Inc. today beat Wall Street expectations for its second fiscal quarter, posting record revenue gains.

Ariba recorded a net loss, excluding non-operating charges, of U.S. $11.5 million, or 6 cents per share, compared with a loss of $2.8 million, excluding non-operating costs, or 7 cents a share, for the same period last year.

Including all charges, the net loss was $125.9 million, or 70 cents per share, reflecting costs for acquisitions including Tradex Technologies Inc. and TradingDynamics Inc.

A consensus of 19 brokers polled by First Call/Thomson Financial predicted Ariba would show a loss of 7 cents a share for the second fiscal quarter, ending March 31.

The company reported a record revenue of $40 million for the quarter, up from $9.5 million, or 322 percent, from the same period last year.

Keith Krach, Ariba chairman and chief executive officer, said in a statement that the quarter was a "watershed," for the company, citing its increased revenue as a sign of its ability to increase market share.

Ariba shares on the Nasdaq exchange slumped at the end of the day along with the rest of the technology-heavy exchange, closing at $65, down $6.90, or 9.6 percent.

Nasdaq dropped 92.8 points to 3,676, or 2.46 percent. Earlier in the day, the exchange had battled back from a 286-point drop to 3,787 points, a 17.8-point gain, or .47 percent. However, it gave up its gains in the last hour of trading.

Despite recent Nasdaq dips and warnings from some analysts that many Internet commerce companies are destined to fail, Ariba's positive quarter shows that companies with attractive products will continue to succeed, said Pierre Mitchell, senior analyst for e-commerce at AMR Research in Boston, Massachusetts.

Ariba's Operating Resource Management System, an Internet purchasing system and other products helped it attract 79 new customers in the quarter, in addition to customers gained through its acquisitions, Mitchell said.

"There will certainly be consolidation (of Internet companies), but the market for trading exchange applications, like those of Ariba, CommerceOne Inc., Oracle Corp., i2 Technologies Inc. and GE Global Exchange Services, will continue to be strong," Mitchell said in a telephone interview.

Ariba, in Mountain View, California, can be reached via the Web at +1-650-930-6200, or at http://www.ariba.com/.

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