NEW YORK Digitas has reported third-quarter net profit of $8.2 million on fee revenue of $59.9 million.
The marketing shop's Q3 net income of $8.2 million, or 11 cents per diluted share, improved from $3.2 million, or 5 cents per diluted share, in the year-ago quarter.
Third-quarter fee revenue for Digitas totaled $59.9 million, up 15 percent from $52.2 million in the year-earlier period, but flat with $60.6 million in the second quarter.
The Boston-based company, which handles digital- and direct-marketing chores for clients like General Motors and American Express, last Friday completed its $160 million stock-for-stock purchase of Modem Media [IQ Daily Briefing, Oct. 15].
Modem Media posted third-quarter fee revenue of $14.6 million, flat with the year-ago quarter and down 9 percent from $15.9 million in the second quarter. The company had net income, excluding transaction costs of $800,000, of $1.4 million and adjusted cash earnings of 5 cents per share. In the year-earlier quarter, Modem's net income totaled $2.1 million, or 8 cents per diluted share, and in the second quarter, its net income was $1.8 million, or 6 cents per diluted share.
For the fourth quarter, Digitas said it anticipates fee revenue of $68-72 million and earnings per share of 2-5 cents. For the full year, the company forecasted fee revenue of $249-253 million and earnings per share of 32-36 cents.
The estimates include the projected results of the operations of Modem for Oct. 15-Dec. 31 and onetime expenditures of $1-2 million, as well as about $3 million in restructuring costs associated with the acquisition's integration. Following the integration of Modem, Digitas said it expects annual cost savings of $4-5 million relating to duplicate public company costs, facilities and other back office functions, with the full effect of that likely be realized in Q3 2005.
Digitas stock (DTAS) closed on the Nasdaq yesterday at $8.39, up 9 cents or 1 percent. Its 52-week high is $13.24; its low, $6.21.