CMGI Falls on Q2 Loss, Outlook

CMGI (Nasdaq: CMGI) fell 28 U.S. cents to$3.63 in morning trading Wednesday, after the Internet incubator reported aloss for the second quarter ended January 31st and said it expects lossesfor the third and fourth quarters as well.

The company, which is in the midst of a restructuring, said it may sell twoof its subsidiaries.

CMGI reported second-quarter revenue of $342.7 million, up 116 percent froma year earlier but 6 percent below the first quarter. The net loss widenedto $2.562 billion, or $7.86 per share, from $185.58 million, or 74 cents, in the year-earlier quarter. Inthe first quarter this year, CMGI lost $636.6 million, or $2.07 per share.

Latest-quarter results included charges of $2.02 billion for the “impairmentof intangible assets,” $549.5 million of amortization charges, and $100million of restructuring charges. The impairment charges relate toacquisitions that were financed with stock during fiscal 2000, before thesteep drop in Internet stock values.

“While there is still much work to do, we continue to make significantstrides on our restructuring, focusing our core competencies, company assetsand business activities on platforms that will build a strong base forCMGI’s future,” said chairman and chief executive officer David Wetherell.

Wetherell said the company is “making significant progress” in reducing itsdependence on advertising revenue, and will be looking into possible future mergers, consolidations or divestitures.

CMGI said it may sell or otherwise divest itself of two subsidiaries:Activate, a provider of streaming broadcast services, and AdForce, whichoutsources advertising software.

The Andover, Massachusetts-based company said it expects revenue for thethird quarter to total $280 million to $290 million, then grow between 3 and5 percent in the fourth quarter. Third-quarter revenue will be hurt by thesale of Signatures Network, as well as a weak online advertising market, thecompany said.

CMGI said it expects operating losses before amortization charges of $236million to $246 million in the third quarter, and $174 million to $184million in the fourth quarter. In addition, the company said there will be restructuring charges of $48million to $52 million in the third quarter, and $42 million to $46 millionin the fourth.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

E-Commerce Times Channels