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Updated from 3:13 p.m. EDT


reported a smaller-than-expected second-quarter loss of a penny a share Monday as its sales more than tripled, pushing the e-commerce company toward the so-far elusive goal of profitability.

Investors were not impressed, however, as shares of plunged 20% in afternoon trading.

The company, which allows customers to bid online for plane tickets, groceries and other goods and services, said new and repeat customers, sales from expanded product categories and marketing efficiencies contributed to its results.

Despite its narrower loss,'s shares fell 9 1/16, or 22.6%, to close at 31.

The Norwalk, Conn.-based company reported that excluding several one-time items, it lost $1.6 million, or 1 cent a diluted share, compared with a loss of $13.9 million, or 10 cents a diluted share, in the second quarter of 1999. Analysts polled by

First Call/Thomson Financial

had predicted a loss of 3 cents a share in the latest quarter.

The net loss for this quarter and the year-ago quarter exclude $381,000 in noncash supplier warrant charges. This quarter's net loss also excludes $2.5 million in option payroll taxes. Including one-time items, the company lost $11.7 million, or 7 cents a share, compared to $14.3 million, or 10 cents a share last year.'s shares fell in part because of

the heightened expectations that followed


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stronger-than-expected earnings report, analysts said.'s shares had jumped 23% since Yahoo reported on July 11, and investors did not feel the announcement warranted that much excitement.

Analysts including Henry Blodget of

Merrill Lynch

were not enthusiastic about's 12% sequential revenue growth, which was no match for the previous year's 112% sequential jump. There was some scrutiny in a conference call Monday morning over's revenue mix.

For the second quarter ended June, revenue was $352.1 million, 216% greater than year-earlier revenue of $111.6 million.

The company is "on the homestretch toward profitability," said Daniel H. Schulman, president and chief executive, in a statement. He said the company continued to attract new customers. The company added 1.5 million in the quarter for a total customer base of 6.8 million, and also posted a 39% repeat rate, up from 26% a year ago.

Even as its shares dropped, executives said in a conference call that they were very happy with their second-quarter results. "I'm extremely enthusiastic about our current position," Schulman said in the call. "We're comfortable and confident as we look ahead." expects to achieve profitability by the fourth quarter.

Schulman expressed confidence about two areas where the company has received media criticism lately -- customer service and competition. He said customer service is his "top priority," and that the company has "fared very well in all of our market battles," emphasizing's unique name-your-own-price policy and its close relationship with airline companies.

"The hullabaloo around


(a new e-commerce company that hopes to capture much of the travel industry when it launches in the fall) is just that," Schulman said. will explore business-to-business, insurance, communications, energy and international opportunities as it moves forward, Schulman said.