Digitas Posts First Quarterly Profit

BOSTON — Digitas posted net income of $711,000 for its first quarter ended March 31.

That performance marks the Boston-based marketing company’s first profitable quarter since it went public in March 2000. It also constitutes a noteworthy improvement compared with the same quarter a year ago, when Digitas reported a net loss of nearly $7 million.

Digitas revenue for first quarter of 2002 was about $50 million, down from $77 million a year ago. The latest revenue figure was, however, an improvement on the $47 million that Digitas reported in the fourth quarter, an indication that the company is is on the right track, according to chairman/CEO David Kenny.

Overall, Digitas’ notched a peformance much like that of competitor Razorfish, New York, which earlier this week posted a modest quarterly profit of $2.5 million despite a sharp revenue decline.

Digitas cut its global staff from approximately 1,800 to 1,100 in the past year and top executives took pay cuts — but Kenny noted consistently strong client relationships, including new interactive work from Millennium Pharmaceuticals and USA Funds, as helping to drive the company’s upturn.

Digitas projects revenue of $200 – 220 million for its current fiscal year, down from $236 million in 2001 and $288 million in 2000. The company also expects to achieve pro forma cash earnings of 3-7 cents per dilutes share in the second quarter. Net income per diluted share was 1 cent per share. Digitas shares have consistently traded around $5 on the Nasdaq in recent months.