All the News That's Fit to Lament

More companies report earnings difficulties

e-Procurement and supply chain companies continued to roll out earnings statements, and the news, while not catastrophic, isn't quite cause for extended revelry sessions at corporate headquarters.

i2 Technologies kicked off the week with its news that it expects to report first-quarter results of license and total revenues of approximately $210 million and $355 million respectively for the first quarter 2001. This reflects 90 percent growth in total revenues over the first quarter of 2000, in which the company reported license and total revenues of $114 million and $186 million. Based on these revenues, the company expects to report earnings of approximately $0.02 per share for the quarter, compared to $0.04 per share for the first quarter last year, both on a fully diluted, pro forma basis. Pro forma earnings exclude such items as amortization of tangibles, write-off of in-process research and development, acquisition-related expenses, employee taxes on stock option exercises, equity investment gains and losses, and non-recurring charges.

Despite challenging economic conditions, i2's revenues grew significantly over the same quarter last year. A large part of our growth in 2000 resulted from companies adopting our solutions to increase their competitive advantage and establish marketplaces based on our technology, said Sanjiv Sidhu, i2 chairman and CEO. Although we continue to see a healthy demand for our solutions, some of our customers are delaying purchasing decisions due to uncertainties about the economy.

We still believe opportunities exist in the under-penetrated markets that we serve, continued Sidhu. This quarter, a fair number of customers chose i2 to improve supply chain and other efficiencies, despite facing an economic slowdown.

The news precipated some cost-cutting procedures. Our previous guidance for 2001 was based on the extremely high demand we saw last year, said Bill Beecher, i2's chief financial officer. Given the current economic environment and the associated decrease in revenue visibility, the company is reassessing its guidance for 2001 and is planning to take measures to reduce its cost structure by five to 10 percent. These cost containment measures may involve reductions of approximately 10 percent of i2's employees. As a result of these cost containment measures, the company expects to take a restructuring charge in the second quarter of 2001.

That announcement was followed Tuesday by news that Ariba would miss earnings estimates and pull out of its merger with Agile, and today Commerce One has announced today that it expected revenue to be approximately $170 million. The company expects net loss per share for the current quarter, excluding non-operating charges, of approximately $0.11.

Commerce One also repeated the familiar refrain of citing the economy's woes in its announcement, even referring to others' blame-assigning comments. "As recently stated by many information technology [IT] companies, we believe today's generally challenging macro-economic conditions are impacting our business, primarily by delaying IT purchases and lengthening sales cycles," said Mark Hoffman, chairman and CEO of Commerce One. "In spite of this challenging environment, we believe that the opportunity for e-marketplaces remains strong. We believe Commerce One is well-positioned to maintain industry leadership based on our global reach, our channel partnerships and the breadth and depth of our solutions."

Clarus Corp.'s earnings are expected to be less than stellar, but not quite as bad as the prevailing mood has been lately. Total revenues for the quarter are expected to be below the range of analyst expectations. Loss per share from operations, however, is expected to be in line with the First Call consensus estimates. 

Clarus expects to report total revenue of approximately $4.5 million, with loss per share from operations expected to be in line with the First Call consensus of $0.97. Steve Jeffery, president and CEO of Clarus, said, "New customer traction in the quarter was strong, up 30 percent over the fourth quarter with an emphasis on Clarus eProcurement sold into traditional companies. Total production and backlog growth were in line with our expectations. The transition of our business model to ratable recognition is ahead of what we planned. We remain optimistic about our ability to proceed on our path to profitability through leveraging our existing infrastructure as well as through the management of costs and the protection of our strong balance sheet."