Modem Media Posts Modest Q2 Gains

NEW YORK Modem Media today reported minor increases in the second quarter, as net income improved 6 percent to $1.8 million and revenue rose 4 percent to $15.9 million.

The Norwalk, Conn.-based i-shop, which is being purchased by Digitas (see related story), posted Q2 net income of $1.8 million, or 6 cents per diluted share, versus $1.7 million, or 6 cents per diluted share, in the year-earlier period.

Revenue for the quarter reached $15.9 million, up from $15.3 million in Q2 2003. The revenue figure was in line with management’s guidance, while net profit exceeded it.

Modem Media president and CEO Marc Particelli attributed the modest second-quarter gains to the agency’s loss of a sizable portion of its General Motors business in a relationship-marketing consolidation, which benefited Digitas.

The interactive agency, which works for Delta Air Lines, IBM and Kraft, among others, projected Q3 revenue of $15-17 million and earnings from continuing operations of 3-5 cents per diluted share without including additional transaction costs. The company’s full-year outlook is $63-67 million in revenue and earnings from continuing operations per diluted share of 18-24 cents without including transaction costs. For 2004, depreciation is anticipated to be $2-2.5 million and capital expenditures are expected to be $2 million.