|
CMGI loss widens
|
 |
March 13, 2001: 5:37 p.m. ET
Internet investment firm's net loss is $2.6B on $342.7M in sales
|
NEW YORK (CNNfn) - CMGI reported a net loss Tuesday that has widened substantially from the same period a year earlier and said it is seeking to divest some of its holdings.
The company, which owns and operates a range of Internet companies including Alta Vista, a leading Web portal, and Engage, which provides Internet marketing software and services, reported a net loss of $2.6 billion, or $7.86 per share for the quarter, its fiscal second, which ended Jan. 31.
That compares with a net loss of $187.8 million, or 74 cents per share, during the same period a year earlier.
At $342.7 million, CMGI's (CMGI: Research, Estimates) revenue rose 116 percent from $158.5 million in the same period a year earlier. That's below the reduced revenue forecast executives provided in January, when they told investors to expect the company to log total revenue between $350 million and $360 million for the quarter.
CMGI also said it is exploring strategic alternatives for two additional subsidiaries, Activate, a provider of streaming broadcast services, and AdForce, a provider of online advertising services. 
"While there is still much work to do, we continue to make significant strides on our restructuring, focusing our core competencies, company assets and business activities on platforms that will build a strong base for CMGI's future," David Wetherell, CMGI's chairman and CEO, said in a statement.
Wetherell also said the company is moving to reduce its dependence on Internet advertising as a source of revenue, shifting its business mix instead to revenue derived from product licensing.
"Moving forward, we'll continue to evaluate each subsidiary company in line with our larger business goals to reach market leadership and profitability and if necessary, effect further mergers, consolidations or divestitures to accelerate the achievement of these goals," Wetherell said.
As an Internet incubator, CMGI's performance rises and falls with the value of the companies it funds. Included in its second-quarter results were charges related to the declining value of those companies of $2 billion, amortization of the intangible assets of those companies and stock-based compensation charges of $549.5 million, and restructuring charges, primarily associated with its previously announced cost-reduction plans, of $100 million.
Excluding these extraordinary charges, CMGI said its operating loss was $216.2 million, or 66 cents per share.
CMGI finished the quarter with over $1 billion in cash, which executives said should be enough to keep the company operating for 27 months.
Shares of CMGI, which have lost more than 95 percent of their value during the past year, rose 6 cents to $3.91 on Nasdaq ahead of the earnings news, which was released after the closing bell. They edged up another 9 cents to $4 in after-hours trade.
Executives at CMGI in Andover, Mass., also warned of slowing sales in the current quarter and the remainder of the fiscal year.
In the fiscal third quarter, the company is now aiming for revenue between $280 million and $290 million. In the fiscal fourth quarter, they are expecting sales to rise between 3 percent and 5 percent from the third-quarter level. CMGI now expects its operating loss to be between $236 million and $246 million in the third quarter and between $174 million and $184 million in the fourth quarter.
In connection with the company's restructuring, CMGI said it expects to record as much as $98 million in charges against earnings. 
|
|
|
|
|
 |
|
