Drugstore.com Narrows Loss

Earnings beat the analyst consensus estimate by a penny.
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posted a narrower third-quarter loss after the market close Thursday.

The online drugstore posted a net loss of $2.6 million, or 3 cents a share, narrower than the net loss of $7.1 million, or 8 cents a share, it posted in the third quarter of 2005. The loss was also narrower than the 4-cent loss the Street was expecting, according to the Thomson First Call estimate.

Drugstore.com posted net sales of $100.6 million, up from $96.6 million in the prior-year period but slightly shy of the $100.9 million that analysts were expecting.

Looking forward, the Bellevue, Wash., company expects fourth-quarter net sales in the range of $108 million to $110 million, net loss in the range of $2.9 million to $3.4 million and adjusted EBITDA in the range of $1 million to $1.5 million. Analysts expect fourth-quarter sales of $110.6 million.

Total orders grew 4% to 1.3 million in the third quarter, the company said.

"Our third-quarter results reflect continued progress in 2006 and steady improvement of our business model, with record positive cash flows from operations," said CEO Dawn Lepore. "As part of our strategic plan, we have focused on our OTC segment where gross margins increased by 320 basis points to 30.2% and contribution margin dollars increased 41% over the third quarter of 2005."

Shares were higher by 6 cents, or 1.6%, at $3.84 in recent after-hours trading.