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B R E A K F A S T W I T H T H E F O O L Friday, October 20, 2000 benjamin.rogers@enron.com _________________________________________________________________ REGISTER TO BECOME A FOOL -- GET FREE STUFF! http://www.fool.com/m.asp?i=162545 _________________________________________________________________ Sponsored By: BUYandHOLD Hey Fool! Want to know the SECRET to long-term investing? Compounding and dollar-cost averaging! Start investing with as little as $20! Just $2.99 per order! http://www.lnksrv.com/m.asp?i=162546 "I was hot. I was smoking 'em. I was having a good time. Even a blind pig finds an acorn sometimes." -- Bill Clinton, after shooting a golf round of 79, fulfilling a lifelong ambition to break 80 COMMERCE ONE REPORTS Q3 Internet B2B company Commerce One posted solid Q3 results after the market's close yesterday and now forecasts profitability by the second quarter of next fiscal year. By Mike Trigg Internet marketplace software provider Commerce One (Nasdaq: CMRC) reported impressive third-quarter results after the market's close yesterday, highlighted by new customer additions and the signing of several global mega-exchanges. The announcement came one day after business-to-business (B2B) juggernaut Ariba (Nasdaq: ARBA) declared its own results, becoming the first B2B company to report a breakeven quarter. Commerce One's fiscal third quarter (ended September 30) net loss, excluding charges, was $14.7 million, or $0.09 per share, compared to $10.3 million, or $0.07 per share, in the same period one year ago. The Street consensus called for a loss of $0.12 per share. The positive results prompted management to revise its initial projection, now calling for profitability by next year's fiscal second quarter (ends June 30). However, revenue figures tell the real story because B2B companies are still in a stage of hypergrowth. Commerce One's revenues increased from $62.7 million in the previous period to $112.7 million. That's 80% sequential growth. The revenue mix was 58% licenses (65% last quarter), with services accounting for the remaining 42% (35% last quarter). Nevertheless, as I mentioned earlier this week, deferred revenues and the amount of network revenues within service revenues were two important factors to track. Let's take a look at those quickly. http://www.fool.com/m.asp?i=162547 Commerce One reported network revenues of $10.1 million, a sequential increase of $3 million. This number is important because it represents the amount of revenue sharing that occurred on active marketplaces and will substantially increase as more exchanges go live. Moreover, it currently represents mostly auction and subscription fees. However, as exchanges mature, it will include a greater amount of value-added and transaction-based revenue. Deferred revenues took a jump from $62 million in the previous period to $95 million. Deferred revenues are a good liability because they represent cash that has been realized before at least a portion of the services have been completed. It's an important figure because it provides up-front investment capital and signifies management isn't overstating business. This quarter's increase can in part be attributed to the company's partnership with SAP (NYSE: SAP); however, management would not disclose to what amount. The alliance with SAP continued to show major traction, despite being just 90 days old. Through the joint partnership, the company announced several mega-exchanges that include eHitex (high tech), Enporion (utility), Quadrem (mining and metals), and ForestExpress (paper and forest products). This gives the company 60% market share for top vertical exchanges. To hear Ariba CEO Keith Krach comment on the Commerce One and SAP alliance, check out Paul Commins' recent Rule Breaker column. http://www.fool.com/m.asp?i=162548 Overall, the company posted a solid quarter and continued to execute, growing its total of 72 marketplaces to 107. Meanwhile, the number of live exchanges improved to 47, and the customer count improved by 96 to 316. The quarter was particularly impressive considering the acquisition of AppNet was only on the books for two weeks, and significant contributions will be made in the services portion of revenue upon a full quarter of contribution. _________________________________________________________________ NEWS TO GO Fiber optic equipment maker Corvis Corp. (Nasdaq: CORV) announced better-than-expected fiscal third-quarter earnings after the market's close yesterday. The company reported a pro forma loss, excluding goodwill expense and equity-based pay, of $23.9 million, or $0.07 per share. The Street consensus called for a loss of $0.09 per share. Revenue came in at $22.9 million. However, the company still relies heavily on Broadwing (NYSE: BRW), which began commercial deployment of Corvis' suite of optical products in the quarter. Corvis closed at $59.60 per share in the regular session and jumped as high as $71 per share in after-hours trading. Internet auction company eBay Inc. (Nasdaq: EBAY) announced its third-quarter earnings, exceeding Street expectations. The company said its earnings, excluding charges, were $19.1 million, or $0.07 per share, compared to $3 million, or $0.01 per share, in the year-ago period. The Street consensus estimate was $0.04 per share. Revenues improved year-over-year from $58.5 million to $113.4 million. In a conference call yesterday, eBay management stated the positive results were due to increased exposure in new geographic regions and additional product areas. Also, it cited a shift toward higher-margin products, such as cars. Voice recognition software provider SpeechWorks (Nasdaq: SPWX) reported third-quarter earnings after the market's close yesterday, with revenues improving nearly threefold year-over-year and earnings that exceeded Street expectations. The Boston-based company reported a loss, excluding charges, of $5.4 million, or $0.20 per share, compared to a pro forma loss of $3.7 million, or $0.19 per share, in the same period last year. The Street consensus forecasted a loss of $0.23 per share. The company reported revenue of $8.6 million, a 237% year-over-year increase. The world's largest maker of cellular phones, Ericsson (Nasdaq: ERICY), reported fiscal third-quarter earnings this morning and cut sales forecasts and profit figures for full-year 2000. The company attributed the revised outlook to losses in its mobile phone division and will now place a greater emphasis on wireless network equipment. The Swedish company is losing valuable market share to Finnish phone maker Nokia (NYSE: NOK), which yesterday predicted profitability in the fourth quarter. It also announced that it would move Swedish and U.S. phone production to Asia, Latin America, and Eastern Europe. Stay tuned for more on this story. Get yesterday's Foolish market wrap-up with one swift click. http://www.fool.com/m.asp?i=162549 _________________________________________________________________ EDITOR'S PICK Ariba CEO Keith Krach talks to the Fool's Paul Commins about the roles customers and partnerships have played in the success of the B2B services company. http://www.fool.com/m.asp?i=162550 _______________________________________________________________ -News & Commentary http://www.fool.com/m.asp?i=162551 -Fool Community http://www.fool.com/m.asp?i=162552 -Post of the Day http://www.fool.com/m.asp?i=162553 -Latest Fribble http://www.fool.com/m.asp?i=162554 -Latest Market Numbers http://www.fool.com/m.asp?i=162555 ____________________________________________________________ My Portfolio: http://www.fool.com/m.asp?i=162556 My Discussion Boards: http://www.fool.com/m.asp?i=162557 My Fool: http://www.fool.com/m.asp?i=162558 Fool.com Home: http://www.fool.com/m.asp?i=162559 My E-Mail Settings: http://www.fool.com/m.asp?i=162560 Sponsored By: BUYandHOLD Hey Fool! Want to know the SECRET to long-term investing? Compounding and dollar-cost averaging! Start investing with as little as $20! Just $2.99 per order! http://www.lnksrv.com/m.asp?i=162561 WANT TO RETIRE EARLY? We'll help you set your retirement date (literally!) in our Roadmap to Retirement Online Seminar. http://www.fool.com/m.asp?i=162562 TRY THE ALL-CASH DIET Get your spending under control with this report from Soapbox.com. http://www.lnksrv.com/m.asp?i=162563 FOOL DIRECT E-MAIL SERVICES Need to change your address or unsubscribe? You can also temporarily suspend mail delivery. Click here: http://www.fool.com/community/freemail/freemaillogin.asp?email=benjamin.rogers @enron.com< Have ideas about how we can improve the Fool Direct or new e-mail products you'd like to see? Try our discussion board: http://www.fool.com/m.asp?i=162564 ____________________________________________________ © Copyright 2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. . MsgId: msg-17332-B10205482Address.msg-09:23:05(10-20-2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: benjamin.rogers@enron.com
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