dcsimg
RealTime IT News

Can Webvan Deliver, Financially Speaking?

Internet grocery company Webvan Group Inc. said it expects a slightly smaller fourth quarter loss than expected, thanks to synergy realized from its September acquisition of rival HomeGrocer.com.

The company, whose stock has been trading for less than $1 a share, said that preliminary estimates for the fourth quarter of 2000 indicate a pro forma diluted loss per share of approximately 23 cents with revenues of approximately $84 million. Analysts had expected a loss of 26 cents a share and revenue of about $100 million.

"We expect that fourth-quarter earnings for fiscal year 2000 will better our earlier estimates for the period despite a general slowing of retail spending in the quarter," said George T. Shaheen, chairman and chief executive officer of Webvan. "We believe that this preliminary estimate of better-than-expected loss per share is the direct result of the synergies realized from our acquisition of HomeGrocer.com and a significantly more efficient marketing spend."

Webvan's stock was trading unchanged at about 47 cents a share in the early going today. Its 52-week high is $18.50; the low is 21 cents. The company, which has never made any money, had a loss of $49 million, or 22 cents a share, in the year-ago quarter.

Shaheen said that a focus on customer retention and ordering frequency led to an expected average order size in the fourth quarter of $112 -- a 10 percent improvement over the third quarter of 2000.

Actual results for the quarter will be reported on Jan. 25.

Webvan offers its shoppers in select areas around the country a personalized courier service that delivers grocery store and drugstore products into customers' homes within a timeframe of their choosing.