Shares of Internet consultants Breakaway Solutions
dropped as much as 21 percent after preliminary fourth-quarter results fell short of expectations.
Breakaway, of Maynard, Mass., said it lost 42 cents per share in the quarter, worse than the 26 to 28 cents loss expected.
Revenues were $15.4 million, below an expected $22.5 million, partly due to the collapse of the dot-com sector.
The company cannot recognize $5.8 million in revenue because of concerns about collecting it from Internet clients. It is reserving $10 million against accounts receivable.
Breakaway also announced it was taking a $200 million charge related to writing down goodwill on the acquisition of Eggrock Partners, and for restructuring costs.
The company last week announced $33 million in funding, but said it was cutting 108 jobs and moving from Boston to Maynard, Mass. The restructuring is expected to save $45 million per year.
Pro forma revenues for the fiscal year were $109.1 million, compared to $39.1 million in 1999.
The company said revenue from venture-backed dot-coms declined from $6.3 million in the third quarter of 2000 to $2 million in the fourth quarter, with a further decline to $775,000 expected in the current quarter.
Revenue from Internet Capital Group, Breakaway’s major backer, declined from $14.1 million in third
quarter 2000 to $3.1 million in the fourth quarter 2000 and is expected to
fall to $700,000 in the first quarter.
Breakaway shares fell 0.219, or nearly 22 percent, to 0.781 on Thursday. The stock is down more than 95 percent from their 52-week high of 85.5.