[BusinessTeam] FT.com News and Analysis World Article.htm

Message-ID: <6B75EF096AE0BE428B8CEDEA89C5F632782392@exchange01.lab49.com> · Tue Apr 03 14:27:14 2001 UTC

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Ariba, Inktomi, BroadVision and i2 cut jobs
By Tom Foremski in San Francisco and FT.com staff
Published: April 2 2001 13:15GMT | Last Updated: April 3 2001 13:34GMT

 i2 technologies
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The US software sector was rocked on Monday by i2 Technologies, Ariba,
Inktomi and BroadVision - leading e-business and internet software
companies - warning of a sharp fall in earnings and announcing significant
layoffs. 

They blamed uncertain economic conditions that had spread to Europe and
delayed orders as slowing IT expenditures by large corporations began to
bite into their operations. 

On Tuesday, shares of Ariba fell 23 per cent to $5 in pre-market trade and
Inktomi was off 32 per cent to $4.20 following their warnings after the
market close on Monday. BroadVision shares fell 27 per cent to $3.28 in
pre-market trade on Tuesday. 

I2, which released its warning before the market opened on Monday, jumped
more than 17 per cent during the day, but fell 63 cents in pre-market
trade on Tuesday. Investors had been cheered by the fact that its news was
not as bad as feared. 

i2 said it would report about 2 cents a share in earnings for its fiscal
first quarter, compared with consensus estimates of 5 cents a share.
Revenues are expected to increase about 90 per cent to $355m over the
year-ago period. 

Bill Beecher, chief financial officer of i2, said prior guidance was based
on very high levels of demand last year. In response to the lower demand,
he set a goal of reducing costs by as much as 10 per cent, which could
involve lowering staff numbers by 10 per cent or 610 jobs, and a
restructuring charge in the second quarter. 

Ariba, a competitor to i2 in business-to-business online markets, said it
expected to report a loss of 20 cents a share compared with consensus
estimates of 5 cents a share. In addition, it pulled out a merger
agreement with Agile Software that had been valued at $2.55bn. 

About 700 staffers or one-third of its total workforce will be cut. 

Inktomi, a leading provider of internet infrastructure software, said it
expected to report a pro forma loss of between 23 and 25 cents a share for
its fiscal second quarter. Consensus analyst estimates were for 4 cents a
share loss. 

It blamed economic conditions in the US and Europe that had declined more
quickly than expected. Cost cutting measures would include reducing its
workforce by about 25 per cent or 260 staff.

BroadVision, which makes software allowing companies to manage their web
sites, warned it would post a first-quarter loss of 14 cents to 16 cents a
share, instead of the profit of about 2 cents per share Wall Street had
expected. 

It is also revised down previously released fourth-quarter results to
include an additional $4m in expenses. 

BroadVision said it was planning to cut 325 jobs, or 15 per cent of its
2,220-strong workforce. 

E-business and internet software companies were expected to be largely
immune from effects of a slowing economy since their applications are
generally used to help customers cut operating costs. The companies are
hoping that the slowdown in orders represents merely a delay and that
those orders are not lost. 

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