Stock Watch: DoubleClick Sinks on Q4 Outlook

DoubleClick, Inc. (Nasdaq: DCLK) sank 5 11/16 to 12 7/16 Friday following news that the online advertising company is expecting a weak fourth quarter. The stock was also reportedly downgraded by analysts at S.G. Cowen and First Analysis.

New York City-based DoubleClick reported third quarter results that were in line with analysts’ expectations — posting a pro forma profit for the first time — but news of the fourth quarter outlook sent company shares to a 52-week low.

Revenue for the quarter rose 79 percent from a year earlier to $135.2 million, while income before items totaled $3.7 million, or 3 cents per fully diluted share, compared with a loss of $3.8 million, or 3 cents, in last year’s third quarter.

Chief executive officer Kevin Ryan said achieving profitability before items was an “important milestone” for the company. “Each year our customer base in our core businesses continues to grow, and we continue to create new products and add strategically even as we show consistent diligence and preparation in expense control,” he said.

Chief Financial Officer Stephen Collins reportedly told analysts and investors that fourth quarter revenue would grow 4 to 6 percent, with pro forma earnings flat with the third quarter’s 3 cents per share. For the 2001 quarter, he reportedly predicted a 5 cent-per-share loss.

Analysts were reportedly concerned about a shortfall at the company’s Abacus Direct unit, which provides information and research to the direct marketing industry. Reports said Ryan, on a conference call with analysts and investors, also expressed disappointment with the unit’s performance and said a restructuring was in the works.

DoubleClick said it had $894 million in cash and marketable securities at the end of the quarter, a $12 million increase from the preceding quarter.

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