Earnings Worries Take Big Toll On Internet Stocks
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Internet stocks had some wind knocked out of their sails Wednesday as several leading companies failed to meet earnings expectations.
Internet.com's Internet Stock Index plunged 67.61, or 9.71 percent, to 628.76 and the Nasdaq dropped 76.22 to 2,507.28. The Dow Jones industrial average continued its winning ways, adding 16.65 to close at 10,411.66 to set a new record.
Search engine Infoseek Corp. (SEEK) tumbled 19-1/8 to 60-3/8 after PaineWebber Internet analyst James Preissler lowered his estimates for the next six months. Preissler's actions came as the company said its latest quarterly revenues doubled to $29.6 million. Preissler's was expecting them to grow to $34.6 million. That prompted NationsBanc Montgomery to lower its estimates as well.
Cable Internet provider @Home Corp. (ATHM) dropped 22-15/16 to 159-1/16 even though the company's latest quarterly earnings met Wall Street estimates. The company got some good news, however, as analysts predicted @Home was on track to meet its goal of 1 million subscribers by year's end. Also, NationsBanc Montgomery Securities analyst Alan Braverman upped his price target 22 percent to 220.
A number of famous Internet plays also lost ground Wednesday after recently setting new 52-week highs. Inktomi Corp. (INKT) lost 7-15/16 to 137, CMG Inc. (CMGI) plunged 42-11/16 to 255-1/8 and America Online Inc. (AOL) shed 8-7/16 to 150-7/8 after reaching a record high of 167-1/2 earlier this month.