FreeMarkets, Inc. climbed 19 1/4 Tuesday to close at 72, bolstered by promising first-quarter results and an analyst upgrade.
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.
U.S. Bancorp Piper Jaffray senior e-commerce analyst Timothy M. Klein upgraded FreeMarkets to strong buy from buy, citing the company’s “blow-out quarterly performance” and “incredible customer momentum, immense market opportunity, and depth of management and expertise.”
On Monday, FreeMarkets announced a five-year, “multimillion-dollar” agreement with Visteon Corp., the company’s largest contract to date. Free Markets will provide Visteon with access to its B2B marketplace, with the auto parts company paying “incremental, volume-based fees.”
“With incredible growth potential among its customer base (less than 5 percent of penetration), strong momentum in customer wins, massive new opportunities in international and government markets, and new initiatives in surplus auctions, we believe FreeMarkets is poised to continue its high-velocity growth,” said U.S. Bancorp’s Klein.