RealTime IT News

Tough Times for E-Commerce Integrators

Demonstrating that the IT spending slowdown just goes on and on, e-commerce outsourcer Digital River, reporting after the market close, posted a first-quarter net loss of $3.5 million or 13 cents per share on a GAAP basis and said its CFO is departing.

That loss compares with a net loss of $6.2 million, or 28 cents per share, in the first quarter of last year. Revenues were something of a bright spot for the Minneapolis-based company , coming in at $18.1 million, up from $13 million in the first quarter of last year.

Earlier today, e-commerce sourcing company Ariba Inc. said it lost $154 million or 60 cents a share in its second fiscal quarter. That was actually good news since in the same period a year earlier Ariba lost $1.8 billion or $7.60 a share on a GAAP basis.

On the bad news side, the Sunnyvale, Calif.-based company said that revenues for the quarter were $57.2 million, down from about $90 million in the same period a year earlier, as the downturn in IT spending showed its teeth.

Life has certainly not been easy recently for companies in the e-commerce integration and infrastructure space. Sluggishness in IT spending is reported across all geographic regions as the Internet recession drags on.

Earlier this month, Pleasanton, Calif.-based e-commerce software maker CommerceOne reported an 81 percent drop in revenue and said it would slash 530 jobs. The company posted a net loss of $220.6 million, or 77 cents a share, compared to a loss of $228.5 million, or $1.02 a share the previous year. It was trading at $1.15 today; down from an all-time high of over $120.

And on April 1, Digital River saw its stock price cut in half when it lowered its financial guidance.

Today the company announced the resignation of its chief financial officer, Bob Strawman, "for personal reasons." He will remain with the company for the next several months during a transition as Carter Hicks, previously senior vice president of operations, becomes the new CFO.

For all of 2002, the company said it continues to expect total revenue to be approximately $73 million to $75 million. The company expects second-quarter revenue to total about $17 million, a 30 percent increase from the second quarter of last year. The stock closed at $4.86, up 30 cents.

Ariba, which calls itself an "enterprise spend management solutions provider" (they sell software that lets companies track down and buy things online), said that pro forma net income for the quarter -- excluding certain non-cash and special charges -- was $1.1 million, or 0 cents per share, beating the Wall Street consensus estimate of a pro forma loss of 1 cent per share.

Ariba is one of those companies whose stock at one point was in the stratosphere, pushing $170 a share; today it was up 49 cents to $3.46 as investors showed that they actually liked the current results.

The Internet recession has burned Ariba more than once. Last July the company reported another whopping loss and the departure of its CEO. And that followed last April's decision to call off its acquisition of San Jose-based Agile Software and slash its work force.

Still, the official word is optimism.

"Despite a challenging market environment, I am pleased with Ariba's performance during the March quarter," said Ariba CEO Bob Calderoni. "Ariba beat expectations once again, strengthened revenues, improved pro forma earnings per share, and demonstrated stability across the income statement and balance sheet."

In February, Ariba officially launched the Ariba Spend Management Suite, an integrated solution for analysis, sourcing and procurement.