Documentum Defies Trend, Beats Expectations

The vendor of content management and document management software lost $1.7 million on sales of $50.6 million for the quarter ended March 31. That compared with a loss of $14.7 million on $45.3 million in sales for the same period last year.

The company's 4 cents per share loss also contrasted with the analyst consensus estimate of 10 cent per share loss as reported by First Call/Thomson Financial.

"We're seeing positive trends in the market," said Dave DeWalt, president and CEO, during a conference call with analysts. He said content management sales were increasingly becoming tied to enterprise application deals, including CRM and portal implementations.

DeWalt also said Documentum was capitalizing on having an experienced sales force and being diversified across a number of sales channels. The company also saw a slight improvement in the average size of deals, from $238,000 in the fourth quarter to $306,000 in the first quarter, and closed five deals in excess of $1 million.

"I think 2001 was good for us in that we saw a lot of pilots and success in small transactions," he said, adding that the company was starting to see a return on those efforts.

DeWalt said the results do not yet reflect the company's release, late in the quarter, of two digital asset management products, which it acquired with Bull Dog. He said the company expected to see incremental revenue from those products in the second half of the year.

Documentum is also intending to roll out an upgrade to its Document management suite sometime near the end of summer that will enable the company to target departmental deployments, offer stronger digital rights, policy management and security features and embrace .NET architecture to expand the number of developers building vertical applications for the platform, company officials disclosed.

Documentum officials said partner-influenced sales accounted for about 60 percent of its revenue during the quarter and that it added 22 new partners during the period.

Interwoven on Thursday, meanwhile, reported a loss of $15.7 million on sales of $37.4 million for the first quarter ended March 31. That compared with a loss of $25.9 million on sales of $60.5 million the prior year.

The revenue and loss of 11 cents per share was in line with a warning Interwoven issued on April 2, but below analysts prior expectations of a 4-cent per share loss on sales of about $42 million. The company cited a weak market in Europe and the United States for the shortfall.