April 2, 2002 4:20 PM PST

Commerce One joins warnings club

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PeopleSoft, peers sing earnings blues

April 2, 2002
E-commerce software company Commerce One warned Tuesday that it would miss sales forecasts for the first quarter, joining a number of software companies delivering disappointing earnings news this week.

The company, which sells online marketplace and purchasing applications, expects to report first-quarter revenue ranging $29 million to $32 million. Analysts expected the company to report sales of slightly more than $40 million, according to First Call.

The news follows a string of first-quarter earnings warnings from a number of business applications companies, including PeopleSoft, Epiphany, BroadVision, Digital River and Onyx Software. Other companies that warned Tuesday include Interwoven, an online content management company, e-learning products providers DigitalThink and SmartForce, i2 Technologies, a maker of supply chain management software, and Vitria Technology, a maker of application integration software.

The rash of bad news sent tech stocks tumbling and has analysts questioning whether or not the market for business software will recover this year as quickly as presumed.

Commerce One said that businesses are more hesitant to spend money on information technology than it expected, and prolonged sales negotiations continue. Commerce One expects to book just $8 million in software license revenue for the quarter. Analysts consider license revenue, which can seed other kinds of business, such as services, a key indication of health for a software company.

On the bright side, Commerce One expects lower operating expenses for the quarter than it previously estimated. Now the company expects expenses to range $88 million to $90 million excluding certain charges. Analysts polled by First Call before Tuesday's warning expected Commerce One to report a loss of 18 cents per share.


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