Business-to-business software maker Agile Software Corp. (Nasdaq: AGIL - news ) on Wednesday posted a narrower fiscal second-quarter net loss and said that business had stabilized, but warned it was way off previous high levels.
"We're seeing demand flatten," chief executive Bryan Stolle told Reuters in a telephone interview. "But that doesn't mean it's going back up, it just means we're not scared witless anymore."
Like every other business-to-business software company, Agile has seen share price tumble as the slowing U.S economy has led corporations to curtail their technology spending.
But by contrast with the previous quarter, Agile saw some large deals come back in the second quarter, such as two seven-figure contracts signed with existing customers Lucent Technologies Inc. (NYSE: LU - news ) and Ciena Corp. (Nasdaq: CIEN - news ), Stolle said.
"We think people feel like they have a grip on where their demand is now and they've budgeted their business around that," Stolle said. "They're still spending less, but at least they're willing to spend something."
But Agile -- which signed 26 new customers in the second quarter -- still saw its revenues slow considerably to $21.2 million, an increase of just 5 percent, from the $20.2 million booked in the prior period. In the first quarter, revenue growth was up 48 percent from the year before and stood at $23.3 million.
Agile, based in San Jose, California, posted a net loss, including numerous charges, of $4.5 million, or 9 cents a share, compared to a net loss of $14.1 million, or 31 cents a share, the year before. Excluding charges, Agile's proforma loss was 9 cents a share, beating analyst's lowered consensus of 12 cents a share, according to Thomson Financial/First Call.
In after hours trading, Agile's shares jumped to $16.40, immediately following the release of its second quarter earnings, after a Nasdaq close of $15.99. The shares later lost those gains and were trading as low as $15.02, according to Instinet.
Since the beginning of the year, the company's shares have lost 70 percent of their value, significantly underperforming their peers in the Standard & Poor's Computer Software ( SPCMSF - news ). The index is up 43 percent over the time period.
Although Stolle said he was optimistic for the long term, he stressed that in the short term, the company's visibility was still poor.
"In the short term, we don't think much has changed," he said. "We think it's still a very cloudy picture."
To that end, Agile forecast that it would lose 10 cents to 15 cents a share in both the third quarter and the fourth quarter of fiscal 2002. That's wider than it's previous estimate of a loss in the range of 5 cents to 15 cents a share.
The outlook is more bearish than analysts' current consensus estimate for a 10-cent per-share loss in the third quarter and a loss of 7 cents a share in the fourth quarter, according to First Call.
Agile also said it sees full year fiscal 2002 revenue of $80 million to $85 million, below analysts' current estimate for annual revenue of $92.42 million.
Prior to its first warning of lower-than-expected earnings for the third and fourth quarter, Wall Street had expected Agile to record a loss of 6 cents in the third quarter and 2 cents in the fourth quarter, according to First Call.
Agile's software enables manufacturers to collaborate with their suppliers over the Internet on new or changing product designs and then find and purchase the necessary components.
Its customers include such high-tech names as Compaq Computer Corp. (NYSE: CPQ - news ), Dell Computer Corp. (Nasdaq: DELL - news ), Juniper Networks Inc. (Nasdaq: JNPR - news ), and Lucent Technologies Inc. (LU.N).
"That (software) solves a real pain point that a lot of companies have right now," Ian Morton, an analyst with J.P Morgan said, adding that Agile's product is also easier to install than competitive products.
"You can put it in, install it and get a very quick pay back," Morton said. "Those are the kind of projects that are getting the green lights right now."