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Updated from Oct. 21

Shares of

webMethods

(WEBM)

bucked the market downturn Wednesday after one analyst upgraded the stock following a strong second-quarter earnings report.

Shares of webMethods were enjoying a boost of 62 cents, or 7.1%, to $9.32 in recent trading after U.S. Bancorp Piper Jaffray senior analyst David Rudow upgraded his rating on the company to outperform from market perform in anticipation of a strong budget flush in the December quarter. His firm has done banking business with webMethods.

Rudow also upgraded on integration software rival

TheStreet Recommends

SeeBeyond

(SBYN)

to outperform from market perform for the same reason. Shares of SeeBeyond were up 37 cents, or 13.2%, to $3.17 in recent trading. (Piper also has done banking business with SeeBeyond.)

On Tuesday, webMethods reported fiscal second-quarter results that beat analysts' estimates, but said business in the current quarter could fall shy of expectations.

webMethods reported a net loss under generally accepted account principles of $4.5 million, or 9 cents a share, in the second quarter, which ended in September. That compared to a net loss of $4.9 million, or 10 cents a share, in the same period a year earlier.

Excluding charges, webMethods posted a pro forma net loss of $3.7 million, or 7 cents a share, in the second quarter, compared to a pro forma net loss of $2.8 million, or 5 cents a share, a year earlier. Revenue declined 1.7% to $45.4 million from $46.2 million a year earlier, but rose 5.1% sequentially from $43.2 million in the previous quarter.

The consensus estimate gathered by Thomson First Call forecast that webMethods would report a second-quarter pro forma loss of 9 cents a share on $44.4 million in revenue, according to Thomson First Call. The company's guidance called for total second-quarter revenue ranging between $42 million and $47 million and a pro forma net loss of $3 million to $6 million, or 6 cents to 12 cents a share.

webMethods expects third-quarter revenue to range from $44 million and $49 million and a third-quarter pro forma net loss to range from 6 cents to 14 cents a share. Analysts were targeting a net loss of 4 cents a share on $48.7 million in revenue in the third quarter.