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i2 boosts 1Q, 2001 revenue goals

    i2 Technologies (Nasdaq: ITWO) beat published fourth quarter estimates in the fourth quarter and told analysts to increase their revenue targets for the first quarter and full 2000.

    In a conference call with analysts Wednesday, executives for the vendor of supply chain management and business-to-business marketplace software said they see first quarter earnings of 6 cents per share on revenue of $361 million, and a full year profit of 37 cents per share on revenue of $1.64 billion.

    Analyst consensus was predicting revenue of $347.4 billion and $1.59 billion for the first quarter and full year, respectively. First Call listed consensus earnings forecasts of 7 cents per share for the first quarter and 34 cents per share for 2000.

    Shares of i2 traded at 50.4921 in afterhours activity on the Island electronics trading network, immediately following the release of quarterly results. i2 gained 5.703125 to 53.875 in Wednesday's regular trading ahead of the earnings report.

    "We haven't seen much of the talked about economic slowdown and you can clearly see our numbers prove that," CEO Sanjiv Sidhu told analysts. "In case of a slowdown, we think that our capability to deliver a huge value quickly will put us at the top of the priority list. ... Our visibility (entering the first quarter) is about the same as it was coming into Q4, which was very good."

    i2's first quarter earnings per share prediction was a penny below First Call's published forecast. However, company executives aren't trying to guide estimates lower, said David Mahoney, analyst with Wit Soundview. Mahoney said executives told him following the conference call that they were merely going with the per-share estimate they had seen in several analyst models.

    "They boosted the outlook a pretty fair amount for overall 2001," Mahoney said. "From talking to i2's customers ... I do know that the pipeline for Q1 looks very strong."

    i2, Oracle (Nasdaq: ORCL) and other vendors of supply chain management software haven't felt the effects of the economic slowdown as much as other tech firms because in a slower economy, corporate customers need to quickly boost productivity, Mahoney said.

    "What they're looking for are applications or new ways to conduct business that increase competitive advantages immediately and also provide a tangible return on investment," Mahoney said. "When you look at breadth and depth and functionality with the supply chain, and extending the supply chain, there really isn't a match for i2."

    i2 reported fourth quarter net income of $44 million, or 9 cents per share, excluding amortization and special charges. Analyst consensus predicted a profit of 8 cents per share on revenue of $349.9 million, according to earnings tracking firm First Call.

    Including amortization, acquisition-related charges, expenses tied to stock compensation and losses from minority investments, i2 in the fourth quarter lost $727 million, or $1.80 per share.

    Fourth quarter revenue increased 116 percent year-over-year to $378 million, in line with the company's forecast. i2 last month said it expected fourth quarter revenue to top $370 million. About 36 percent of i2's overall revenue came from outside the United States.

    License revenue increased 120 percent year-over-year and 21 percent sequentially to $244 million, 47 percent coming from high tech companies, 22 percent from consumer goods and retail and 17 percent from automotive and industrial firms. Existing customers generated 62 percent of i2's license revenue.

    "The numbers are strong," CFO William Beecher said during the analyst call. "The results we've reviewed speak for themselves."

    For the full year, i2 earned $108.4 million, or 26 cents per share, excluding special charges. The company reported 2000 revenue of $1.13 billion.

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