Earnings reports for the quarter ended March 31st are beginning to trickle in, and most e-commerce companies’ results are beating analysts’ expectations.
Of the 31 Internet companies that have reported so far, 29 came in ahead of estimates, one on target, and one below, according to First Call. Though the research firm does not break out e-commerce companies from the rest of the Internet pack, the retail and financial sectors are doing well so far, according to the numbers.
Brokerage Business Brisk
Online brokers Ameritrade Holding Corp. (Nasdaq: AMTD) and E*Trade Group (Nasdaq: ETRD) were among the first to file results. Both came in ahead of expectations, reporting strong trading revenue and more new customers.
Ameritrade was one of the few Internet companies to actually post a profit during the quarter. The company earned $3.2 million (US$), or 2 cents a share, in its second quarter ended March 31st, down from $8.1 million, or 5 cents, in the year-earlier quarter. Revenue soared to $170.3 million from $63.7 million.
Analysts had expected the company to lose 4 cents a share in the quarter. Ameritrade said it added more new customers during the quarter than it did in all of 1999, and processed 149,000 trades a day, up from 52,000 in the year-earlier quarter.
E*Trade also saw some black ink, thanks to robust stock trading. The company posted an operating profit of $1.3 million, or breakeven per share, in its second quarter, compared with an operating loss of $13.3 million, or 5 cents, a year earlier. Analysts had expected a loss of 16 cents a share.
Ahead of Last Year
As a group, Internet companies are doing an average of 117 percent better than a year ago, according to First Call. In many cases, however, that just means a smaller loss, and investors are becoming impatient with companies that have yet to achieve profitability.
On the retail side, Webvan Group, Inc. (Nasdaq: WBVN) beat analysts’ estimates, with a pro forma loss of $38.7 million, or 12 cents a share, a penny better than expected. The online grocer said active customer accounts at the end of the quarter totaled 87,000, up from 47,000 at the end of the fourth quarter. Repeat orders accounted for 78 percent of total orders during the latest quarter, and the average order size rose to $90.33 from $81.31.
Large e-tailers have yet to report results.
B2B Firms Post Revenue Gains
B2B companies’ results are also coming in ahead of expectations. PurchasePro.com, Inc. (Nasdaq: PPRO) was able to beat estimates with a net loss before charges of $8.3 million, or 28 cents per fully diluted share, against estimates of 29 cents and a year-ago loss of $6.1 million, or 22 cents. Revenue rose 575 percent to a record $4.5 million.
PurchasePro Chairman Charles E. Johnson, Jr. called the results “outstanding,” and said the company’s “business model is clicking on all cylinders.” Johnson has reportedly decided not to take cash or stock compensation until his company turns a profit.
E-commerce software maker Commerce One, Inc. beat analysts’ expectations, despite posting a larger loss than a year earlier.
Revenue rose to $35.0 million from $2.1 million, while the company’s net loss before non-operating charges widened to $14.0 million, or 9 cents a share, from $7.8 million. Commerce One posted a net loss of $43.6 million, or 29 cents a share, compared with a loss of $12.3 million, or 14 cents, a year earlier.
The revenue gain was driven by “strong demand in all sectors,” said Mark Hoffman, chairman and chief executive officer. The B2B software company said it gained 70 new customers during the quarter, including Citigroup, Boeing and Eli Lilly, bringing the total customer count to 135. The company also became a partner in an automotive-exchange venture with the Big Three automakers and similar ventures involving the oil and defense industries.
Online marketplace FreeMarkets, Inc. (Nasdaq: FMKT) said its net loss widened, though a huge jump in revenue led U.S. Bancorp Piper Jaffray to upgrade the stock to strong buy from buy.
First-quarter revenue rose to $10.8 million from $3.5 million in the same period last year. The company’s net loss, however, widened to $8.4 million, or 24 cents per diluted share, from $492,000, or 4 cents. The company said 47 customers now use its B2B marketplace, up from 34 at the start of the quarter and just 8 a year earlier. The number of suppliers participating in online auctions rose to more than 4,000, up from about 3,000.
eBay, Priceline on Tap for Next Week
Next week will be a watershed for e-commerce results: eBay, Inc. (Nasdaq: EBAY) and Priceline.com (Nasdaq: PCLN) are scheduled to report on Monday, and Amazon.com (Nasdaq: AMZN) will weigh in on Wednesday.