L90 Says it Will Beat Street

Amid a tough quarter for online marketing companies, ad network and server L90 Monday gave guidance that it will post a loss but likely beat Wall Street estimates for its third quarter.

The company said quarterly revenues have increased 350 percent from the year-ago period, to about $16.2 million. After expenses, this will mean that L90 still will post an estimated $0.22 per-share loss. Nevertheless, analyst consensus had the company turning in a $0.25 per-share loss.

This is a greater loss than last quarter, when it posted a loss of $0.20 per share, which nevertheless beat Street estimates of $0.22.

While posting a heavier loss than last quarter, the guidance remains good news for L90 in what has proved a soft quarter for the industry. Several firms, like Avenue A and Mediaplex, said that they would miss third quarter earnings and revenue estimates.

L90 attributed its relatively strong quarter to sales of its ProfiTools suite of online marketing products, which consists of packaged version of its banner ad, e-mail, viral and promotional marketing offerings. The company announced the product early this month.

“Rather than focusing strictly on banner ads that are inherently unproductive for advertisers and Web sites, our technologies are designed to build more powerful relationships,” said president and chief executive officer John Bohan.

“The downfall of many good dot-coms has not been a failure to attract visitors, it has been the failure to turn them into customers,” he added. “L90’s focus is in creating an integrated, opt-in marketing platform that enables our advertisers and Web site clients to build stronger relationships with consumers.”

Although flushed with the news of beating the Street’s estimates, the company — and the entire industry — might be in store for tough quarters ahead. Investors hammered DoubleClick after it posted its first profitable quarter last week, as executives gave guidance for a first quarter 2001 loss.

Merrill Internet industry analyst Henry Blodget also predicted that industry growth would continue to decelerate through first quarter.

L90 will present its earnings report on October 25.

Shares of LNTY spiked more than 20 percent following the news, up from a previous close of $6.06. While trading around $7.44 at press time, the stock is still more than 77 percent off its 52-week high of $31.38.

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