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Commerce One Report Could Foretell B2B Fortunes

One analyst says a fumble by this B2B leader could mean bad things for other stocks in the sector.

The press-release stage of business-to-business e-commerce may finally be coming to an end. Finally.

With many stocks more than 50% off their highs, investors are now looking past the overblown hype of B2B to find out how these companies will actually make money in the future. In that context, the results of one of their leaders,

Commerce One

(CMRC)

, will be the center of attention when it reports its quarterly financials after the close of regular trading today.

"It's very important that Commerce One deliver good numbers," says William Epifanio, an analyst at

JP Morgan Securities

who rates the stock a buy, and whose firm has not performed underwriting for the company. "If it were to stumble, it would have a substantially negative impact on the B2B stocks. Commerce One has become a very visible name, and people would view

any disappointment as a very negative indicator at exactly the wrong time."

The market, in any case, seemed to believe Wednesday morning that Commerce One would not disappoint. With the

Nasdaq

down slightly, Commerce One was up 12 5/8, or 15%, by midmorning.

Analysts expect Commerce One to show a loss of 24 cents a share on around $20 million in revenue. How it veers off that target -- in either direction -- could help shape how other B2B shares move.

At this point there are already signs of life. Commerce One,

Ariba

,

TheStreet Recommends

(ARBA)

and

i2 Technologies

(ITWO)

have started to make gains off last week's losses. And there was good news on Monday: Auto-parts manufacturer

Visteon

took a 4.7% stake in

FreeMarkets

(FMKT)

to participate in its exchange, even though FreeMarkets is currently trading 80% below its highs.Visteon did not return a call seeking comment on the FreeMarkets deal.

Meanwhile, in their earnings calls, B2B CEOs this week and last have struck extremely bullish stances. The look-at-this-opportunity tone started last week when Ariba reported an estimate-busting quarter of $40 million in revenue. It was followed this week by positive calls from FreeMarkets,

E.piphany

(EPNY)

,

Vitria Technology

(VITR)

, and i2 Technologies.

Vignette

(VIGN)

and

VeriSign

(VRSN) - Get VeriSign, Inc. Report

are also slated to report tonight, with

Exodus Communications

(EXDS)

,

pcOrder.com

(PCOR)

and

Mercator Software

(MCTR)

set for Thursday.

With Commerce One stepping up to the plate tonight, if it can connect, the B2B ball may be back in play. "Sentiment certainly changed," says Ian Morton, B2B analyst for

Chase H&Q

. "But it looks like it might be changing back again. While stock market gyrations have gone on, the business fundamentals for a lot of these companies have only gotten stronger. Sure, these are incredibly ebullient, bullish calls, but they're also delivering against that."

Which is the thing every B2B investor is hoping to hear from Commerce One tonight.