Razorfish Expects 4Q Loss | Adweek Razorfish Expects 4Q Loss | Adweek
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Razorfish Expects 4Q Loss

  • March 28, 2011, 9:19 PM EDT
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NEW YORK -- Razorfish Inc. expects to report a drop in fourth-quarter revenue and post a surprise loss for the quarter, saying companies have become "more deliberate" about investments in technology because of economic trends.The Web-design and consulting firm said late Tuesday it expects revenue to come in at about $50 million, down from $52.1 million in the year-earlier quarter. As a result, the company said it expects to report a loss, excluding noncash and nonrecurring items, of 17 cents to 22 cents a share.The mean estimate of analysts surveyed by First Call/Thomson Financial was for earnings from operations of two cents a share in the fourth quarter. In the year-earlier quarter, the company posted earnings from operations of $5.8 million, or six cents a share."The market for our services has changed dramatically and we underestimated the magnitude of this shift," Razorfish Chief Executive Officer Jeff Dachis said in a prepared statement. "As a result, we overestimated the visibility of our pipeline and our performance expectations. Despite the market shift, we still believe that the underlying trends and strengths of our business model remain in place." The company also said sales cycles have grown longer because projects have grown larger and more complicated "as companies move beyond phase one of their digital transformation."Razorfish said it doesn't plan any significant staff reductions and that it is confident of its "ability to weather this transition."In 4 p.m. EST trading on the Nasdaq Stock Market, Razorfish (RAZF) was up 53 cents, or 21 percent, to $3.09. Shares moved lower in after-hours trading and were changing hands at $2.28 at around 5 p.m., according to the Island ECN order book.Copyright (c) 2000 Dow Jones & Company, Inc.