BOSTON Following a surprise return to the black during the final quarter of 2002, independent marketing shop Digitas said it expects to record a profit again in this year's first quarter.
The Boston-based company anticipates fee revenue of $52-54 million for the first quarter of 2003. "We believe the company is well positioned for continued growth in revenue, earnings and cash flow," said Jeff Cote, Digitas chief financial officer. "We remain cautiously confident about our outlook for 2003."
Digitas yesterday reported net income of $1.7 million or three cents per share in the fourth quarter. That compares to a net loss of $44.5 million or 71 cents per share in Q3 and a loss of $6.3 million or 10 cents per share in the year-ago period.
Fee revenue totaled $51.4 million for the fourth quarter, up 9 percent compared to $47 million a year ago. Total revenue, including reimbursable pass-through expenses, was $92.3 million compared to $66.6 million in Q4 2001.
"Having our revenue up 9 percent makes for a strong year," said David Kenny, chairman and chief executive officer of Digitas. "The business is on solid ground; new clients are coming in…But we live in troubled times. The situation in the Middle East affects marketers over here." He called the company's outlook "cautious optimism."
For full-year 2002, Digitas posted a net loss of $40.3 million or 65 cents per share, a considerable improvement on its 2001 net loss of $94.1 million or $1.58 per share. Fee revenue reached $203.9 million in 2002, compared with $235.5 million for the prior year.
Digitas shares closed Wednesday on the Nasdaq at $4.11, up 13 cents or 3.27 percent. The stock's (DTAS) 52-week high is $6.10 and 52-week low is $2. The company provides a mix of interactive, direct and traditional marketing for clients such as Allstate, American Express, AT&T, Bayer Pharmaceuticals, Best Buy, Delta Air Lines and General Motors.
—David Gianatasio and Ann M. Mack