WebMethods Says 4Q To Beat Estimates, Shares Jump

webMethods Inc.

WebMethods, a Fairfax, Virginia-based maker of software that enables complex business systems to communicate, did not provide any figures for its fiscal fourth quarter, which ended March 31.

But the news was enough to cheer investors, who pushed up shares of webMethods more than 14 percent, or $2.20, to $17.90 in morning trade. The stock was one of the top percentage and net gainers on the Nasdaq.

Analysts, on average, were expecting webMethods to post a loss of 5 cents a share, according to Thomson Financial/First Call.

WebMethods' positive view comes the same week that top tier software companies, including PeopleSoft Inc., i2 Technologies Inc. and Interwoven Inc., blamed still weak tech spending for disappointing quarterly results, dampening investor hopes for a near-term recovery in the battered sector.

PeopleSoft was off 40 cents, or 1.5 percent, at $24.74. I2 was down more than 3 percent, at $4.65.

Like most software companies in 2001, webMethods was forced to lower earnings estimates, reduce headcount and aggressively cut expenses amid the economic downturn.

Then, in the third quarter, the company said the environment had finally stabilized and customers were slowly beginning to pick up their spending on technology projects.

At that time, it told analysts to expect fourth-quarter earnings to be flat with the third quarter's, when it posted a loss, excluding certain items, of 5 cents a share on revenue of $49 million.

RIVALS WARN OF WEAKER REVENUE

After the market closed on Tuesday, rival Vitria Technology Inc. warned of a far wider loss than analysts were expecting, citing delayed spending by some customers.

Shares of Vitria were off more than 22 percent, at $2.67 in morning trade.

Sunnyvale, Calif.-based Vitria said it now expects a first-quarter loss before charges related to stock compensation and an acquisition of 20 cents or 21 cents a share. Analysts had been looking for a loss of 6 cents a share, according to First Call.

On Monday, webMethods rival SeeBeyond Technology Corp. told Wall Street it expects first-quarter profit to meet its prior guidance but said revenue would be slightly below analysts' expectations.

For the quarter ended March 31, SeeBeyond said it expects a profit, excluding charges, of 3 cents a share and revenue of $42 million to $42.5 million. SeeBeyond was up 1.12 percent, or 9 cents, at $8.

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