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WIT Soundview Lays Off 60 as Q4 Losses Widen

With fiscal fourth quarter losses widening by some 85 percent, Silicon Alley investment bank WIT SoundView Group, Inc. said Wednesday it would lay off 60 employees and reduce its earnings outlook in 2001.

WIT SoundView, which invests in Internet and technology companies, reported fourth quarter losses of $25.7 million, or 24 cents per share, up from the $8.1 million (13 cents per share) loss recorded during the same year-ago quarter.

Fourth quarter revenues reached $92.0 million, up 14 percent from the third quarter while full-year revenues were $375.5 million.

"The current capital markets environment can best be described as challenging, particularly for investment banking services such as IPOs and follow-on offerings. While we expect our institutional brokerage to continue to grow, we expect overall revenues and earnings comparisons for the first half to be down from last year's reported results," said WIT SoundVIEW CEO Robert Lessin.

"(We) expect slower growth for 2001 than we had previously discussed. As we move ahead into the year, we will reassess our internal forecasts and as we have a clearer picture, we expect to be in a better position to provide the financial community and our shareholders with guidance on how the business is doing and what we see for the balance of the year," he added.

The company said the staff cuts, which represent about 14 percent of the workforce, came after a "thorough review of personnel and market conditions."

"We have focused on retaining our key employees and, to more closely align their interests with shareholders interests, our Board has approved amendments to our stock incentive plan that allows us to grant an additional 20 million options to our employees, most of which are expected to be granted by the end of the first quarter," the company added.

Additionally, WitSoundview's board of directors have authorized the repurchase of up to 2 million shares on the open market from time to time.

"We're very pleased to have achieved such strong revenue performance this quarter, despite one of the most difficult capital markets environments in recent history. Our performance, driven by the strength of our M&A and institutional businesses, reflects the success of our efforts to diversify revenues and create a long-term and stable business model," the company's CEO added.

Immediately after the earnings announcement, Bear Stearns downgraded WITC's stock rating from "Buy" to "Neutral". At midday, WITC stock was trading at $5.12, down a few pennies from the $5.18 opening.