CNET Networks Inc. reported a wider-than-expected loss for the first quarter and forecast that revenue for the second quarter would, at best, be flat with the just-ended period, and that its loss would likely widen even further.
The Internet media firm had a net loss of $316.6 million, or $2.33 a diluted share, compared with a pro forma net loss of $167.5 million or $1.31 a share, a year earlier. Last year’s results assume CNET (CNET) owned ZDNet during the entire fiscal year; the acquisition took place on Oct. 17, 2000.
Excluding goodwill amortization, business-integration expenses, realized gains/losses on investments and income taxes, CNET reported a loss of $18.2 million, or 13 cents a diluted share, compared with pro-forma earnings of $2.5 million, or two cents a share, a year earlier. Analysts surveyed by Thomson Financial/First Call were looking for a loss of 10 cents a share. That estimate was lowered from earlier expectations of a loss of three cents a share following CNET’s March revenue warning.
Revenue was $75.2 million, a 19% decline from pro-forma revenue of $92.8 million a year earlier. In March, CNET forecast that revenue would come in between $75 million and $80 million; its original forecast had been for revenue as high as $92 million.
CNET had twice warned that the slowdown in online advertising would hurt its bottom line. The first warning came in February, when CNET reported its year-end results. At the time, the company said it would have to eliminate 10%, or 190 jobs, from its work force to help offset lower revenue.
The company cut its guidance again in March, saying it expected a loss before interest, taxes, depreciation and amortization, or Ebitda, of between $5 million and $12 million. The company’s actual Ebitda loss was $11.7 million.
For the second quarter of 2001, CNET estimated net revenue will be in the range of $70 million to $75 million — at best flat and possibly lower than the first-quarter total. The company set a revenue target for the full fiscal year of between $310 million and $328 million.
In a statement, the company said it “believes reasonable Ebitda targets are a loss of between $12 million and $20 million in the second quarter of 2001, and a total Ebitda loss of approximately $29 million to $55 million for full-year 2001.”
Copyright (c) 2001 Dow Jones & Company, Inc.
CNET Reports Wider Net Loss
