i2 expects to report license and total revenues of approximately $210 million and $355 million respectively for the first quarter 2001. This reflects 90 percent growth in total revenues over the first quarter of 2000, in which the company reported license and total revenues of $114 million and $186 million. Based on these revenues, the company expects to report earnings of approximately $0.02 per share for the quarter, compared to $0.04 per share for the first quarter last year, both on a fully diluted pro forma basis. Pro forma earnings exclude such items as amortization of tangibles, write-off of in-process R&D, acquisition-related expenses, employee taxes on stock option exercises, equity investment gains and losses, and non-recurring charges.
Despite challenging economic conditions, i2’s revenues grew significantly over the same quarter last year. A large part of our growth in 2000 resulted from companies adopting our solutions to increase their competitive advantage and establish marketplaces based on our technology, said Sanjiv Sidhu, i2 chairman and CEO. Although we continue to see healthy demand for our solutions, some of our customers are delaying purchasing decisions due to uncertainties about the economy.
We still believe opportunities exist in the under-penetrated markets that we serve, continued Sidhu. This quarter, a fair number of customers chose i2 to improve supply chain and other efficiencies despite facing an economic slowdown.
Our previous guidance for 2001 was based on the extremely high demand we saw last year, said Bill Beecher, i2’s chief financial officer. Given the current economic environment and the associated decrease in revenue visibility, the company is reassessing its guidance for 2001 and is planning to take measures to reduce its cost structure by five to ten percent. These cost containment measures may involve reductions of approximately ten percent of i2’s employees. As a result of these cost containment measures, the company expects to take a restructuring charge in the second quarter of 2001.
