Online marketer Promotions.com, Wednesday announced its preliminary third quarter revenue estimates, predicting a loss of 41 to 46 cents per share in yet another case of the online marketing industry’s current spate of woes.
While the company could beat estimates — Wall Street predicted a loss for the company of 43 cents — the company is feeling the effects of the much-publicized slowdown in online ad spending by dot-coms.
“The third quarter has been difficult for e-marketing companies,” said Promotions.com chairman and chief executive officer Steven Krein, echoing now too-familiar statements by other publicly traded players.
The dearth of dot-com ad money hit the entire industry hard, with companies like ValueClick and Avenue A missing earnings estimates, and other online marketing companies — like industry giant DoubleClick — seeing their market valuation tumble more than 70 percent off its 52-week high.
At press time, shares of PRMO were trading at $1.94 — off 21.5 percent of Tuesday’s close of $2.46, and a far cry from the company’s 52-week high of $35.
Promotions.com said its losses are due in large part to a slowing down of promotions using its Webstakes.com site, which is basically a consumer promotions portal.
“While dissatisfied with this quarter’s performance, we remain highly confident about our company’s long-term growth potential in the Internet promotion marketplace,” Krein said.
He also pointed to the fact that the industry will be increasingly buoyed by more traditional marketers moving online in the near future — another prediction that players are holding on to, praying for a reverse in online marketers’ downward revenue trends in fourth quarter and early 2001.
Promotions.com estimated revenues for the third quarter will be between $6.4 million and $6.9 million, with a net loss of $5.8 million to $6.5 million.
The company estimates EBITDA losses before one-times charges at between $3.4 million and $4.1 million, or 24 and 29 cents per share.
