i2 Beats Estimates, Expects Growth

i2 Technologies (Nasdaq: ITWO), the Dallas, Texas-based maker of business-to-business (B2B) software, reported fourth-quarter results that beat analyst expectations, and said that it sees no sign of a slowdown in demand for its products.

The company said that revenue for the quarter climbed 116 percent from a year earlier, to US$378 million. Full year revenue topped $1.1 billion, up 97 percent from the prior year.

i2 reported income before extraordinary items of 9 cents per share, compared with 5 cents in the year-earlier quarter. The results beat the consensus forecasts of analysts, who were looking for 8 cents per share.

After all items, however, the company reported a net loss of $727 million, or $1.80 per share, compared with net income of $15 million, or 4 cents, in the fourth quarter a year earlier.

No Sign of a Slowdown

"We clearly haven't seen a slowdown in our business so far, and we expect that our value proposition -- high ROI [return on investment] and quick payback -- positions us as a strategic investment to improve competitiveness even during slower economic growth," said i2 chairman and chief executive officer Sanjiv Sidhu.

Sidhu also said that i2's results in the current quarter and for the year show that the company provides software and services that are valuable aids in a market where many companies are increasingly concerned about profitability, competitiveness and customer satisfaction.

"We're looking forward to our next significant milestone -- $5 billion in revenues -- with associated earnings," Sidhu said.

Ups and Downs

Analysts at Deutsche Bank and US Bancorp Piper Jaffray reportedly repeated buy recommendations on i2 early Thursday, while Bear Stearns began coverage with a buy rating.

Goldman Sachs, which has the stock on its recommended list, raised estimates for the company's 2001 earnings.

Nevertheless, i2 shares fell in early trading Thursday, losing $3.81 to $50.06 in the first 10 minutes. The stock was then holding in that range through the morning.

Operating Margin Improves

"Pro forma operating margin for the quarter grew to 17 percent, dropping more to the bottom line than ever before," said chief financial officer Bill Beecher. "i2's earning power, as measured on a pro forma operating margin, shows the strength inherent in i2's model."

Beecher added: "i2 not only grew sales, but as planned, we grew margins faster."

According to the company, one of its key assets is intellectual property. Beecher said that the firm's technology portfolio includes "some of the richest and most difficult in the industry to replicate."

License revenue for the quarter rose 120 percent from a year earlier to $244 million. International revenue accounted for 36 percent of total revenue, because of strong demand from Europe and the Asia-Pacific region, the company said.