Epoch Partners Issues Research Note on Ariba

Ariba Misses Big in Q2; Back to Basics?



Apr 03, 2001, 01:00 ET from Epoch Partners, Inc.

    SAN FRANCISCO, April 3 /PRNewswire/ -- Mark Verbeck, Senior Analyst,
 Software with Epoch Partners today issued a Research Note on preliminary
 Q2 results for Ariba, Inc. (Nasdaq: ARBA). The following are key highlights
 included in the Research Note, which can be accessed in its full form at the
 Epoch Web site (www.epoch.com):
 
     -- Ariba reported preliminary 2Q revenues well below our expectations,
        resulting in a ($0.20) loss versus our already reduced $0.03 estimate.
        Licenses of $55-$60 million came in at less than half of our estimates
        ($130 million) on drastically reduced marketplace revenue and weak
        procurement sales.
     -- To compensate, Ariba is reducing headcount by 700 (30% of the company).
        In addition, Ariba also announced the termination of its announced
        merger agreement with Agile, delivering a blow to its recently
        introduced value chain management strategy.
     -- While we believe a lack of IT spending in the current economic climate
        has severely affected the stock, we also believe Ariba could do well
        going forward to focus on what it does best -- indirect procurement.
     -- Even with a reduced cost structure, we estimate Ariba must grow
        revenues significantly (we estimate by a third) from current levels to
        achieve breakeven. We expect the stock will mark time as the company
        reorganizes its sales effort in an exceedingly difficult environment.
 
     Software Research Coverage
     Investors can visit Epoch's Web site for additional commentary on the
 software sector, which includes a multimedia software industry overview and
 research coverage on the following public companies in this sector:  Ariba,
 Inc., Commerce One, Inc., Corio, Inc., i2 Technologies, Manugistics Group, MRO
 Software, Oracle Corporation and Pivotal Corporation.
     In addition, investors can be added to the Software email alert system,
 which alerts investors to new research in the Software sector. To be added to
 this alert system visit
 http://pluto.sparklist.com/scripts/lyris.pl?join=epochebusinesssoftware.
     Full research coverage on other companies under coverage by Epoch is
 available for free to investors through the Epoch Web site (www.epoch.com).
     Epoch Partners is a technology-enabled investment bank focused on
 high-growth companies and electronically connected institutional and
 individual investors.
     The information contained herein is based on sources believed to be
 reliable but is neither all inclusive nor guaranteed by Epoch Partners.
 Opinions, if any, reflect our judgment at this time and are subject to change.
 Epoch Partners does not undertake to advise of changes in its opinion or the
 information. Epoch Partners may perform or seek to perform investment banking
 services for the issuers of securities which are the subject of our Research.
 Most of the companies Epoch Partners follows are emerging growth companies
 whose securities typically involve a higher degree of risk and more volatility
 than the securities of more established companies. The securities discussed in
 the Epoch Partners Research may be unsuitable for investors depending on their
 specific investment objectives and financial situation and needs. No report
 included in the Epoch Partners Research is a recommendation that any
 particular investor should purchase or sell any particular security in any
 amount or at all and is not a solicitation of any offer to purchase or sell
 from or to any particular investor. For additional information that may be
 available on the securities mentioned, please contact Epoch Partners.
 
     Epoch Partners is a member of the National Association of Securities
 Dealers, CRD number 103899.
 
 
 

SOURCE Epoch Partners, Inc.
    SAN FRANCISCO, April 3 /PRNewswire/ -- Mark Verbeck, Senior Analyst,
 Software with Epoch Partners today issued a Research Note on preliminary
 Q2 results for Ariba, Inc. (Nasdaq: ARBA). The following are key highlights
 included in the Research Note, which can be accessed in its full form at the
 Epoch Web site (www.epoch.com):
 
     -- Ariba reported preliminary 2Q revenues well below our expectations,
        resulting in a ($0.20) loss versus our already reduced $0.03 estimate.
        Licenses of $55-$60 million came in at less than half of our estimates
        ($130 million) on drastically reduced marketplace revenue and weak
        procurement sales.
     -- To compensate, Ariba is reducing headcount by 700 (30% of the company).
        In addition, Ariba also announced the termination of its announced
        merger agreement with Agile, delivering a blow to its recently
        introduced value chain management strategy.
     -- While we believe a lack of IT spending in the current economic climate
        has severely affected the stock, we also believe Ariba could do well
        going forward to focus on what it does best -- indirect procurement.
     -- Even with a reduced cost structure, we estimate Ariba must grow
        revenues significantly (we estimate by a third) from current levels to
        achieve breakeven. We expect the stock will mark time as the company
        reorganizes its sales effort in an exceedingly difficult environment.
 
     Software Research Coverage
     Investors can visit Epoch's Web site for additional commentary on the
 software sector, which includes a multimedia software industry overview and
 research coverage on the following public companies in this sector:  Ariba,
 Inc., Commerce One, Inc., Corio, Inc., i2 Technologies, Manugistics Group, MRO
 Software, Oracle Corporation and Pivotal Corporation.
     In addition, investors can be added to the Software email alert system,
 which alerts investors to new research in the Software sector. To be added to
 this alert system visit
 http://pluto.sparklist.com/scripts/lyris.pl?join=epochebusinesssoftware.
     Full research coverage on other companies under coverage by Epoch is
 available for free to investors through the Epoch Web site (www.epoch.com).
     Epoch Partners is a technology-enabled investment bank focused on
 high-growth companies and electronically connected institutional and
 individual investors.
     The information contained herein is based on sources believed to be
 reliable but is neither all inclusive nor guaranteed by Epoch Partners.
 Opinions, if any, reflect our judgment at this time and are subject to change.
 Epoch Partners does not undertake to advise of changes in its opinion or the
 information. Epoch Partners may perform or seek to perform investment banking
 services for the issuers of securities which are the subject of our Research.
 Most of the companies Epoch Partners follows are emerging growth companies
 whose securities typically involve a higher degree of risk and more volatility
 than the securities of more established companies. The securities discussed in
 the Epoch Partners Research may be unsuitable for investors depending on their
 specific investment objectives and financial situation and needs. No report
 included in the Epoch Partners Research is a recommendation that any
 particular investor should purchase or sell any particular security in any
 amount or at all and is not a solicitation of any offer to purchase or sell
 from or to any particular investor. For additional information that may be
 available on the securities mentioned, please contact Epoch Partners.
 
     Epoch Partners is a member of the National Association of Securities
 Dealers, CRD number 103899.
 
 
 SOURCE  Epoch Partners, Inc.