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Viant Warns of Third-Quarter Shortfall; Stock Slammed After Hours

Ilan Tsapovski

The 14-analyst First Call/Thomson Financial estimate called for third-quarter earnings of 8 cents a share. The Internet consulting company expects revenue for the third quarter to fall about 12% to 15% below the $38.5 million revenue figure reported for the second quarter. In the third quarter of 1999, Viant reported revenue of $18.8 million and net income of 3 cents a share.

Viant shares were down $3.88 to $10 in after-hours Island trading. They ended the regular session down 63 cents to $13.88.

President and CEO Bob Gett attributed the revenue shortfall to the perception that "many Global 2000 companies have slowed down their e-business initiatives and have taken the opportunity to step back and revisit their strategies."

Consultant, Heal Thyself Viant takes a late-August dip

Well before the warning, Lehman Brothers this morning slashed its 12-month price target on Viant to $30 from $50 and cut its third-quarter revenue estimate to $42 million from $45 million. Not quite far enough, as it turned out, but a decent start.

Lehman analyst Karl Keirstead said in a research note that "visibility" -- Wall Street parlance for the ability to forecast a company's results -- "has deteriorated and the demand mix may be shifting."

Keirstead also noted that Viant had been silent on its quarter for some time "under the guise of the pending [Securities and Exchange Commission] disclosure rules ... and the silence has damaged Street confidence."

Credit Suisse First Boston analyst Barry Chubrik yesterday lowered his rating on Viant's stock to buy from strong buy. "The market has changed 180 degrees from a year ago," Chubrik said. "Fortune 1,000 companies are going to make bigger bets. This means larger projects ... which favor the top-tier names." The news sent Viant's shares falling nearly 12% to $14.50.