After disappointing third-quarter results, CMGI‘s
new CEO put subsidiaries on notice that they must meet pro forma break even in fiscal 2003.
“We are not satisfied with the performance of the business as a whole during the third quarter,” said George McMillan, completing his first full quarter at the helm of the Andover, Mass., Internet investor.
CMGI, whose properties include search engine AltaVista, posted a pro forma loss of $54.5 million, or 14 cents per share, compared to a loss of $42.4 million, or 11 cents per share, for the previous quarter.
Analysts expected a loss of 13 cents in the most recent quarter.
Revenue was $187.4 million, off 11 percent from $211.2 million in the first quarter. CMGI’s results were hampered by poor performances from auction site Engage
, as well as $8 million
in real estate write-offs.
McMillian said CMGI and its subsidiaries will continue to take “advantage of every opportunity to cut costs,” specifically consolidating IT functions. McMillan said
he was “comfortable” with the company’s current workforce.
He also reaffirmed CMGI’s commitment to the New England Patriots’ stadium naming rights deal.
The results comes three weeks after CMGI warned it would likely miss third and fourth quarter and fiscal 2002 targets because of lagging demand.
CMGI still believes that it will reach break-even on a pro forma operating basis in the first half of fiscal 2003.
“Our priorities remain the achievement of pro forma break-even and the strengthening of our revenue and asset base through both organic growth and acquisition, and improved sales and marketing processes,” McMillan said.
To that end, CMGI should soon learn if its $11 million bid for the remaining shares
of Engage it doesn’t already own is successful. Because the deal is pending, CMGI executives could not comment.
CMGI’s earnings were announced after markets closed. Earlier shares sank 0.05, or 7 percent, to close at 0.62. In the last 52 weeks, the issue has ranged from 0.6
The Nasdaq National Market moves to delist firms whose stock has traded below $1 per share for 30 consecutive days. To date, CMGI has not received an alert from market officials.
If it does, McMillan said it will consider a reverse stock split, among other options, so that the issue regains compliance.