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FairMarket, Inc. (Nasdaq: FAIM) fell 0.12 to 1.56 Wednesday after the company, which provides dynamic-pricing services for companies doing business online, said fourth-quarter revenue will be below previous expectations as it writes off some "doubtful accounts."
Still, the Woburn, Massachusetts-based company said it expects a smaller operating loss for the fourth quarter that is less than reported for the third quarter, excluding charges related to a planned workforce reduction announced in October. In the third quarter, the company posted a US$8.5 million loss before equity-related charges, or 30 cents per share.
FairMarket said revenue for the fourth quarter will likely total $3.1 million to $3.3 million, below previous estimates of $3.6 million. First-quarter 2001 revenue will be "in approximately the same range," as the operating loss continues to improve, the company said.
The company aims to break even on a cash-flow basis in the first quarter of 2002.
Most of the accounts being written off are those of dot-com customers, FairMarket said.
"We have sharpened our focus on the large retailers, manufacturers and distributors, for whom our discount and clearance solutions are delivering the greatest value, and are building from there," Fairmarket president and chief executive officer Eileen Rudden said.
FairMarket also said it restructured an agreement with Excite@Home in order to eliminate a $7.5 million commitment for it to buy online advertising in 2001.
Under the new agreement, the companies will launch later this month
an Excite Outlet Center,
providing sale and clearance items for sale. The center will use auction,
falling-price and
fixed-price formats to sell products from retailers including JCPenney,
CompUSA and Dell Computer.
