Echoing what has become a familiar refrain in the Web consulting industry,
warned Tuesday that it expects lackluster revenue in the third quarter, largely because of diminished demand from dot-com clients.
Wall Street, in turn, reacted as it did when it first heard that concern last week from two other companies; Xpedior's stock plunged $2.56, or 23.7%, to close at $8.25 Tuesday, well off its 52-week high of $34.75.
Xpedior, based in Chicago, said it feared that revenue in the quarter would drop about 10% from the $62.9 million in the second quarter of this year. Still, revenue is expected to climb 65% from the $34.5 million posted in the comparable quarter of 1999, the company estimated.
"Customers are committed to using the Internet for business," David Campbell, president and chief executive of Xpedior, said in a statement. Yet a weaker appetite among dot-com businesses has prompted corporations well beyond the more volatile Internet sector to hold back on their online projects, Campbell added.
At the same time, though, Xpedior said it hoped to deliver expected revenue growth in the fourth quarter of this year. "We remain excited about the demand for e-business solutions providers," Campbell said, "and Xpedior's prospects for continued strong growth."
Xpedior's disappointing news comes as no surprise. Last week,
, two other Internet consulting businesses,
cautioned that they would report a third-quarter loss, instead of a predicted profit, as cash-strapped dot-com companies scale back their efforts. That, in turn, has taken some pressure off bigger corporations to expand their e-business plans, the companies complained.
Viant's stock, which plunged more than 40% Friday, dropped another 19 cents, or 2.3%, to close at $8 Tuesday. IXL's shares fell $1.63, or 16.4%, to close at $7. Analysts, pointing out that many of the Web consultants offer similar services, say the companies are poised for consolidation.