announced better-than-expected earnings Tuesday in its first quarter as a publicly traded company.
Analysts polled by
looked for a loss of 27 cents a share. The company's reported loss of 21 cents per share wasn't a total surprise, given the many new deals announced in the quarter by webMethods, which is staking a claim as a leader in the up-and-coming market for XML (extensible markup language) technology for B2B e-commerce.
Revenue for its fiscal-2000 fourth quarter increased more than 350%, to $10.4 million from $2.3 million in the year-ago quarter. Including amortization of deferred stock compensation and accrued dividends related to preferred stock, the net loss was $8.2 million, or 28 cents per share. Without the noncash charges, the net loss was $6.3 million, or 21 cents a share.
For the fiscal year ended March 31, 2000, total revenue increased at an even faster rate, growing more than 410%, to $23 million from $4.5 million in fiscal year 1999. The net loss for the year, excluding amortization of deferred stock compensation, was $16.4 million, or 62 cents a share, compared with the three-analyst estimate of 68 cents.
For the fiscal year 1999, net loss was $3.3 million, or 13 cents per share. Including amortization of deferred stock compensation and accrued dividends relating to preferred stock, net loss for fiscal year 2000 was $28.4 million, or $1.08 per share.
"I think that we're getting clear signs that this is a mainstream market. They've demonstrated that they can execute, that they can grow," said analyst Steve Sigmond, of
Dain Rauscher Wessels
, which managed webMethods' IPO in February. He added that the company has the first-to-market advantage in an industry webMethods has dubbed B2Bi, or B2B integration for the uninitiated.
"I think all the signs point to XML being a standard like HTML. webMethods is not really in the business of licensing XML. Their products do the integration, not just XML, but legacy formats as well," he added.
XML is a programming language like HTML, which enables computers to transmit data across the Internet. Unlike HTML, which tells computers only how to display information. XML can label the information, such as whether a number is a price or quantity.
The day before the earnings announcement, Fairfax, Va.-based webMethods issued a press release detailing its recent agreement with
to provide the telecom company a secure communications network with its suppliers. webMethods' software replaces existing fax, email, telephone and paper communication with a single platform for the exchange of data such as order status and schedule changes. The new communication platform offers real-time data, unlike previous methods, and is fully automated, freeing up employees for other tasks.
In April, webMethods signed deals with two other big names,
, to similarly integrate communications between the companies and their large customers. Staples.com is the e-commerce subsidiary of
. In all, webMethods added 36 new customers in the quarter.
Despite the company's steady growth, its stock price has risen sharply and fallen precipitously, often on no news. On Feb. 11, the day of its debut on the
, webMethods closed up 500%, at 212 5/8, from an offering price of 35.
A couple of months later, webMethods was one of the Nasdaq's many April victims. Its stock fell almost 80 points in two days, a 55% slide, to close at 63 15/16 on April 14. The following trading day, April 17, the stock hit its all-time low of 61 3/4. Recently, the stock has recovered, closing Tuesday at 113 3/4.