Commerce One Warns Of Revenue Drop

Commerce One Inc. (CMRC--Nasdaq) is making slow progress redefining itself as a supply-chain vendor--and the IT spending slump isn't helping. Last week, it warned that quarterly sales will be as much as 20% below previous estimates.

CFO Peter Pervere blames lower-than-expected software sales in Europe and Asia for third-quarter revenue of $80 million to $83 million, creating a loss of 24 cents to 25 cents a share, excluding certain expenses. The company had expected sales to match its $101.3 million second quarter.

Commerce One originally focused on online marketplaces; the company now is positioning its products as supply-chain tools. But, says Current Analysis market analyst Shawn Willett, "they need to come out with a little better game plan and a little better differentiator between themselves and i2 Technologies and some of the other vendors."

Commerce One's archrival Ariba Inc. (ARBA-Nasdaq) is also suffering: It expects fiscal fourth-quarter sales of $60 million to $70 million, compared with earlier estimates of $89.4 million.