Agile Soft warns of slump in earnings

Siobhan Kennedy

NEW YORK: Agile Software Corp. on Friday more than doubled its loss forecast

for the fiscal first quarter, becoming the latest business-to-business software

company to fall prey to sagging market conditions. "The economic picture is

ugly and virtually all of our customers are experiencing financial

challenges," Agile chief executive Bryan Stolle said on a conference call

with analysts.

The firm said it now expects a loss, excluding unusual charges, of 9 cents to

11 cents a share for the first quarter, ended July 31. In late May, Agile had

forecast a loss of 2 cents to 5 cents a share.

When the company issued its original earnings warning, Wall Street analysts

were forecasting a loss of 3 cents a share. Analysts' current loss estimates

range from 4 cents to 9 cents a share, with a consensus forecast of 5 cents,

according to research firm Thomson Financial/First Call.

Agile, which plans to report first-quarter results on Aug 16, said it sees

revenues of $22 million to $23 million for the period. According to First Call,

analysts' forecasts range from $24 million to $26.5 million. In the year-earlier

first quarter, Agile reported a loss of 3 cents a share on revenues of $15.8

million.

Echoing statements by other business-to-business software companies, he said

orders were not being canceled but were being pushed back to later quarters as

customers ride out the economic storm. "The business opportunities were

there, we just failed to execute to this new, much tougher standard,"

Stolle said. He added, however, that Agile is engaged in several sales deals

that, if clinched, would represent the largest transactions the company has ever

done.

Agile's software enables manufacturers to collaborate over the Internet on

new or changing product designs and then find and purchase necessary components.

Its customers include such high-tech names as Compaq Computer Corp., Dell

Computer Corp., Juniper Networks Corp. and Lucent Technologies Inc.

Wedbush Morgan Securities analyst George Santana said he was not surprised by

Agile's warning the company had previously said revenues would be flat over the

next two quarters. "The problem is (that) 75 to 80 per cent of Agile's

customer base is high-tech manufacturing, and that's not doing very well these

days," he said. "So with that in mind, Agile's going to have a

difficult time just like anybody else."

Business-to-business software companies i2 Technologies, Ariba Inc. and

Commerce One Inc. have all reported wider losses for the quarter ended June 30.

In January, Agile agreed to be acquired by Ariba for $2.55 billion in stock, but

the deal fell through in April as Ariba continued to suffer in the slowing U.S.

economy.

Santana said Agile would still make a good acquisition target, given that its

software helps businesses save money. "But I just don't see who's coming

in," the analyst said, adding that Agile "went through such a bad

experience with Ariba" that it might not be eager for another suitor.

Stolle said Agile did not plan to give any financial guidance for the second

quarter until its first-quarter earnings report on August 16. In its earnings

warning in late May, the company forecast a loss of 2 to 5 cents a share for

both the first and second quarters.

(C) Reuters Limited 2001.