Modem Media Posts Revenue Declines

NEW YORK — Despite a return to profitability in the fourth quarter, Modem Media recorded its fifth consecutive quarter of revenue declines. According to its earnings report, released late last week, that trend could continue. The Norwalk, Conn.-based i-shop projected that revenues could decrease by 12 percent in the first quarter and by as much as 20 percent for full year 2002.

Modem Media posted revenue of $103 million for 2001, a decline of 23 percent from the year before. Revenue for the fourth quarter totaled $20.5 million, down 11 percent from third quarter and 42 percent from Q4 2000.

Meanwhile, the i-shop expects revenue of about $18 million in the first quarter of 2002 and revenue in the range of $80-90 million for the full year 2002.

“While our North American business is recovering consistent with our expectations, we are experiencing a steeper than expected fall-off in demand for interactive marketing services in our European and Asian businesses,” explained Frank Connolly, Modem Media CFO, in a statement.

The net loss for 2001 was $6.8 million or 26 cents per share, an improvement over 2000’s net loss of $74.2 million or $3.04 cents per share. The net loss included one-time charges totaling $16 million from restructuring and severance costs and asset and goodwill write-offs.

In the fourth quarter of 2001, net income, which also included one-time charges, was $549,000 or two cents per share. That is compared with a net loss of $1.9 million or 8 cents per share for the third quarter and a net loss of $61.7 million or $2.47 per share for the fourth quarter of 2000.

“2001 was transitional year for our industry and our business,” said Modem Media president and CEO Marc Particelli, adding that the interactive shop is “well positioned for growth as the economy recovers.”

Modem Media stock (MMPT) was trading on the Nasdaq at $3.60 Monday, up 11.8 percent.