[CBS MarketWatch] Analysts mixed on CMGI results

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From: Linda (joelinda1@home.com)
Date: Fri Sep 22 2000 - 14:40:42 PDT

[Here 'ya go, Adam. At least CMGI's stock held steady on a most
incredible "wash-and-rinse" day on Nasdaq (panic gap open to shake
out weak longs, followed by major institutional accumulation on
volume of 2.1B.) This is a good sign. Let's *hope* this puts a
floor on CMGI's stock price.



Analysts mixed on CMGI results

By Ted Griffith, CBS.MarketWatch.com
Last Update: 9:54 AM ET Sep 22, 2000

ANDOVER, Mass. (CBS.MW) -- With analysts giving mixed reviews to
the Internet investment and operating company's fourth-quarter
financial results, CMGI shares gained ground Friday.

After the close of regular trading Thursday, CMGI (CMGI: news, msgs)
said its net loss for the three months ended July 31 was $635 million,
or $2.17 per share, compared to a profit of $452 million, or $2.12 per
share, registered in the year-ago fourth quarter.

The company was expected to report a loss of $2.45 per share for the
quarter, according to the average estimate of analysts polled by First

CMGI's fourth-quarter revenue surged to $377.2 million, up 568 percent
from last year's fourth-quarter revenue of $56.5 million.

Shares of CMGI weakened at the start of trading Friday before
recovering to $37.63, up $1.19, in early action.

Half empty or half full?

Robertson Stephens analyst Michael Graham offered positive comments on
CMGI's report.

"We believe that CMGI is validating its model with an accelerated
transition to an operating model," Graham wrote in a research note.
"We are optimistic that this process will lead to a large profitable
company and reiterate our buy rating."

Dain Rauscher Wessels analyst Mark Rupe was less enthusiastic.

"The business climate in each segment remains challenging, limiting
near-term upside in CMGI shares," Rupe wrote in a research note.

For the fiscal year, CMGI reported revenue of $898.1 million, compared
with $186.4 million generated in fiscal 1999. While sales soared, the
bottom line didn't follow suit -- CMGI reported a net loss of $1.4
billion, or $5.26 per share, compared with a fiscal 1999 profit last
year of $474.6 million, or $2.30 per share.

The company was expected to report a loss of $5.58 per share for all of
fiscal 2000, according to analysts polled by First Call.

CMGI reported sequential revenue growth in its five operating segments.
The search and portals segment -- which includes some of CMGI's
highest-profile units, such as IPO hopeful AltaVista -- reported
revenue of $98 million in the fourth quarter, compared with $86 million
in the third quarter.

During a conference call after the quarterly report, CMGI Chief
Executive David Wetherell said he expects four of the five operating
segments to achieve positive cash flow by the end of fiscal 2001.
Andover, Mass.-based CMGI's infrastructure and enabling technologies
segment will lag behind the others in achieving profitability,
Wetherell said.

"We had a strong quarter and completed a fiscal year with a great
number of accomplishments," Wetherell said during the call.

Right-sized for profitability

Earlier this month, CMGI said it plans to scale back the number of its
Internet operating companies as part of a new emphasis on achieving
profitability, settling on the five operating segments and a sixth
encompassing it Internet venture-capital funding operations.

CMGI has also been cutting jobs. AltaVista, a majority-owned unit of
CMGI, announced plans last week to reduce its work force by 25
percent in a business realignment of its own. On Thursday, CMGI's
online marketing unit, Engage (ENGA: news, msgs), said it had
eliminated about 13 percent of its work force.

During the conference call, Wetherell said CMGI has no plans for
additional layoffs. "We think we can get to profitability with the size
of the work force we have now," Wetherell said.

CMGI's stock was once among Wall Street's highest fliers. But the stock
has fallen sharply this year as investors have soured on
Internet-related companies and their lack of profits.


"I think I'm going to take my prospective business partners
and swim them out into the bay about a half mile and then
negotiate terms. Because you know -- for me -- swimming is
not some macho ritual meant to weed out weaklings, it's a
refreshing way to start the morning and have a real
conversation without distractions. I have found that fear of
drowning is a real effective way to get people to a very
honest no-nonsense frame of mind."
   --John Witchel, CEO of Red Gorilla

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