Stock Watch: Digital River Falls on Slower Q2 Sales

Digital River Inc. (Nasdaq: DRIV) fell 2 1/2 to 7 3/4 Thursday after the e-commerce software maker said sales for the second quarter ending June 30 will be below analysts’ estimates.

“The expected results are related to greater than anticipated seasonality in our software services division,” said Chief Executive Officer Joel Ronning. “The second quarter is typically slower in the software market, and a lack of new product offerings from our client base compounded the situation.”

Though sales will be in the range of $30 million to $31.5 million, the company said, it expects to “meet or better” analysts’ consensus estimates for per-share results. According to First Call/Thompson Financial, analysts’ consensus for Digital River’s quarter calls for a loss of 40 cents per share.

“We continue to believe we are on track to meet the previously announced profitability targets of profit before depreciation and amortization in our software services division by December of 2000 and overall company profitability before depreciation and amortization in latter 2001,” Ronning said.

Minneapolis, Minnesota-based Digital River provides site design, hosting and other e-commerce services to businesses. Clients include Dell Computer Corp., Autodesk Inc. and

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