Digitas Q4 Net Income Falls

NEW YORK Digitas said its fourth-quarter income fell slightly from a year earlier while sales grew.

The Boston-based agency group reported total fourth-quarter net income slipped slightly, falling to $7.7 million from $8.1 million in the same period in 2003. (On an earnings-per-share basis, net income fell to 9 cents per share from 13 cents a year earlier.) Digitas reported fee revenue of $71 million, up 33 percent from fourth-quarter 2003.

Digitas was hurt by AT&T’s decision in July 2004 to stop marketing local and long-distance phone service to consumers. Delta also cut back on marketing, the company said.

“We accomplished our goals despite some formidable challenges,” David Kenny, Digitas CEO, said in a conference call with investment analysts.

Separately, Digitas said chief financial officer Jeff Cote would leave the company April 1 to become chief operating office at Ropes & Gray, a Boston law firm. Digitas named Brian Roberts, the company’s chief accounting officer, as Cote’s replacement.

Kenny said the integration of Modem Media was going well and “already showing real promise.”

Digitas said it expects sales of $77 million to $81 million in the first quarter. It expects net income of 9 cents to 11 cents per share in the quarter.

Kenny declined to elaborate on the company’s decision to adopt a shareholder rights plan to guard against potential hostile takeovers, other than to say it “wasn’t a quick reaction.”

“The directors feel it’s important to have something there in case something happens,” Kenny said.