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Ariba beats 1Q estimates, sees better-than-expected 2Q

Ariba (Nasdaq: ARBA) easily topped analyst estimates in the first quarter and predicted higher-than-expected results for the second quarter and rest of the year.

After market close Thursday, the vendor of business-to-business marketplace software and services reported fiscal first quarter net income of $14 million, or 5 cents per share, excluding special charges, on revenue of $170.2 million.

Analyst consensus expected a profit of 2 cents per share on revenue of $154.75 million, according to earnings tracking firm First Call.

Ariba also forecast per-share earnings of 6 cents on second quarter revenue of $180 million to $185 million, and 25 to 26 cents on full year revenue of $780 million to $790 million.

First Call consensus was calling for a second profit of 4 cents per share on revenue of $178.5 million and full year earnings of 18 cents per share on revenue of $751.2 million.

Shares of Ariba traded at 39.375 in afterhours activity on the Island electronic communications network, following the earnings report. Ariba rose 3.3125 to 43.375 in Thursday's regular trading ahead of the news.

Including non-cash charges, Ariba lost $347.6 million, or $1.48 per share.

First quarter revenue increased 625 percent year-over-year.

"Our revenue growth and profitability are the ultimate validation of a well-balanced strategy and Ariba's best-of-breed eCommerce applications," said Keith Krach, chairman and CEO.

However, analysts already expected Ariba to report strong earnings. The stock has been battered by lingering concerns about growth in network services revenue, new customers and deferred revenue, Wit Soundview analyst David Mahoney wrote in a research note released Thursday ahead of Ariba's report.

"The direction of the trends were not positive after last quarter's results," Mahoney wrote. "We believe Ariba reports very strong results this evening, but we maintain our hold rating until we see a sustainable reversal of the trends from last quarter.">