Digitas Posts Strong 2nd Quarter as Losses Fall

Digitas has reported a 59 percent boost in revenue, to $70.1 million, for the quarter that ended June 30.
The Boston relationship marketing firm said its second quarter loss fell to $5.3 million, compared with a loss of $12.3 million for the same period in 1999.
Second-quarter pro-forma cash earnings were $5.1 million, or 7 cents per fully diluted share, compared with $1.4 million, or 2 cents per share, for the same period a year ago.
David Kenny, chief executive officer of Digitas, said the results reflect the “sustainability of our business model; in particular, our ability to attract top-tier clients.”
Several noteworthy clients have come aboard recently, including Ann Taylor stores and Domino’s Pizza, mainly for interactive marketing and Web development assignments.
Since Digitas made its initial public offering in March, industry watchers have questioned the company’s ability to maintain momentum while posting consistent quarterly losses.
Agency officials, however, have dismissed shortfalls as the result of recent restructuring. Last week’s upbeat numbers, analysts said, are a promising development.
“The fact they cut the losses is [crucial] in today’s marketplace,” with investors still skittish about tech-driven stocks, said Burlington, Mass.-based consultant Bill Montbleau. “The market is still impressed with [Digitas]. They’ll have to keep trending in a positive direction,” he added.
Traded under the DTAS symbol on the Nasdaq exchange, shares hit $40 on the first day of trading in March, but the price has ranged from the high-teens to mid-20s in recent weeks. K