Internet incubator CMGI (Nasdaq: CMGI) reported narrower operating and net losses for the first quarter ended October 31st, thoughrevenue slipped from a year earlier.
The Andover, Massachusetts holding company also late Tuesday restated results for fiscal 2001 to correct “inadvertent errors made in the calculation of some non-cash items.”
“Despite a difficult economic quarter, our successful efforts tosignificantly reduce our operating losses and complete the necessaryfinancial restructuring tasks underscore the drive of CMGI to complete ourbusiness realignment and set the stage for the company’s future growth,”said chairman and CEO David Wetherell.
Ups and Downs
The changes increase the net losses for the fourth quarter ended July 31st by 9 percent to US$1.33 billion, and forthe fiscal year by 2 percent to $5.49 billion.
However, CMGI also said it expects the current quarter to show its first sequentialincrease in revenue since the fourth quarter of 2000.
In early trading Wednesday, CMGI shares were down 19 cents, or 8.3 percent, at $2.11. A year ago, the stock traded at $13.
Revenue for the latest quarter slipped to $200.68 million from $358.05million in the same period a year earlier, CMGI said. At the same time, the company’soperating loss narrowed to $207.08 million from $896.72 million, while thenet loss shrank to $224.8 million from $636.56 million.
The net loss for the latest quarter included $84.7 million of amortizationcharges, asset impairment charges of $36.6 million, and restructuringcharges of $89.8 million. Before those charges, the company lost $68.1million, or 19 cents per share.
The writedowns cover investments in Pacific Century CyberWorks, venturecapital investments and marketable securities.
“With this difficult period behind us, we look forward to the remainingquarters of this fiscal year to demonstrate the revenue momentum alreadyevident in many of our core businesses,” Wetherell said.
Last month, CMGI said it completed thesecond phase of a two-part restructuring and was on track to reach itslong-term goals. The company, which at one time backed a slew of Internetbusinesses, is now concentrating on bringing just a few to profitability.
For the second quarter, CMGI expects revenue of $210 million to $220 million, with four to six of its eight revenue-generating subsidiaries seeing sequential revenue gains. In the first quarter, two operating subsidiaries reported revenue growth.
Revenue for fiscal 2002 as a whole should total $900 million to $950 million, CMGI said.
CMGI said it expects a pro forma operating loss of $40 million to $45million for the second quarter, with a loss for the full year of $150million to $165 million.
The company expects to break even — on a pro formaoperating basis — in the first half of fiscal 2003.
CMGI said the quarter saw “significant accomplishments” from its remainingoperating businesses, including a rise in users at auction subsidiary uBidand an agreement between the auctioneer and Microsoft (Nasdaq: MSFT) that makes uBid thepremier provider of content and products to Microsoft’s auctions channel,which is set to launch this month.
The AltaVista search-engine company, another CMGI business, signed analliance with Oracle and launched two new search services during the quarter.