Electronic commerce software giant Ariba Inc. led a pack of at least a dozen other Internet companies in issuing profit warnings Monday, signaling that the long-awaited recovery of the tech sector may take longer to arrive than previously thought.
Analysts hoping for a rebound in late summer or early fall said the uniformly poor results from the first three months of the year prompted them to push back those estimates to year-end.
"It's indicative of a long-term sickness in the industry," said Rob Enderle, an analyst for Giga Information Group. "It indicates the market clearly has not bottomed. The bottom is still to come, and we might not even be close."
Amid a barrage of profit warnings, Mountain View, Calif.-based Ariba said its revenue for the first three months of the year was about $90 million, a 125% increase over the same period in 2000 but not enough to turn a profit. The company said it will lose about 20 cents a share, compared with the 5-cents-a-share profit expected by analysts.
Ariba also said it will slash one-third of its staff in a cost-cutting move.
"We were expecting a cut that required stitches, and they actually had to do an amputation," said Jon Ekoniak, senior research analyst with U.S. Bancorp Piper Jaffray in Menlo Park.
Ariba made the announcements after the markets closed. Its shares fell $1.41 to $6.50 in regular Nasdaq trading.
The timing of the latest tech warnings, on the first business day of a new quarter, led some analysts to suspect that the companies had been holding out for the kind of last-minute sales that are typical of the software industry.
But others said it's common for such companies to wait until all the data are in before warning investors of a shortfall.
"They wanted to give a more accurate figure about how bad they missed by," Ekoniak said.
Ariba Chief Executive Keith Krach blamed the shortfall on "the prevailing economic uncertainty," which prompted would-be customers to defer technology spending.
Ariba wasn't alone in blaming revenue shortfalls on the sinking economy. Inktomi Corp., the Foster City firm whose software speeds the delivery of Internet content, said lower-than-expected revenue would force it to report a quarterly loss of 23 cents to 25 cents a share, up from the 4-cents-a-share loss anticipated by analysts polled by First Call/Thomson Financial.
Inktomi said it will cut 25% of its staff to save money.
