NBCi is beginning to see the fruits of its labors, thanks in large part to its belt-tightening and structural reorganizations.
In announcing smaller-than-expected losses for the third-quarter, NBCi said it anticipates operating profits (that is, before non-cash charges) by the fourth quarter of 2001 or the first quarter of 2002,
approximately two quarters ahead of previous expectations.
“In June, when we announced our refined strategy, we said loudly and clearly that we are focusing on the domestic, consumer Internet market,” said Will Lansing, NBCi’s CEO. “With this narrowed focus, we’ve been able to significantly streamline our business, and we are expecting to advance profitability by approximately two quarters. This, combined with our more than $600 million in cash and NBC promotional credits, puts us in better shape to grow the company moving forward.”
Recently, NBCi has reorganized its AllBusiness.com unit as well as its other sites to streamline operations. The moves included the layoffs of about 20 percent of its workforce, or 170 workers.
As a result of its recent changes, NBCi will no longer recognize revenue generated from AllBusiness.com, which NBCi recently agreed to contribute to the formation of a new company focused on the business-to-small-business market. The AllBusiness transaction, combined with our decision to exit other non-profitable, non-core businesses, such as expanding international operations, coupled with the current challenges within the advertising market, requires NBCi to reset its revenue projections.
NBCi is also resetting its revenue estimates for the fourth quarter of 2000 and the fiscal year 2001. For the fourth quarter of 2000, the company anticipates revenue to be consistent with its third quarter 2000 revenue. For the fiscal year 2001, it expects revenue to approximate $150 million.
NBCi is also resetting estimated earnings for the fourth quarter ending December 31, 2000 to a range of $0.75 to $0.85 loss per share on a pro forma basis. The current First Call consensus estimate is a loss per share of $1.11. For the fiscal year ending December 31, 2001, NBCi estimates earnings to come within a range of $2.05 to $2.25 loss per share on a pro forma basis, compared to the current First Call consensus estimate of $3.01 loss per share.
NBCi posted a pro forma loss of $54.8 million, or 88 cents a share, compared to a pro forma loss of $17.1 million, or 87 cents a share. Analysts had expected the company to post a loss of $1.00.
