At CMGI, the Charges Keep on Coming - TheStreet

Good news for



: After writing down an eye-popping $2 billion in assets in the quarter ended Jan. 31, the Internet company wrote down


$609 million worth in its latest fiscal quarter.

But seriously, folks: On Tuesday evening, the Massachusetts-based Internet incubator reported mixed results for its third quarter ended April 30, narrowing its operating loss on revenue that fell sequentially from the second quarter but exceeded forecasts.

CMGI, which has labored over the past several months to cut its cash burn amid the dot-com implosion, now says it has enough cash to last 12 quarters, up from its estimate earlier this year that its cash would last nine quarters. The company also said it remains on track to meet its lowered estimate of $1.3 billion in revenue for the fiscal year ending July 31.

But the news wasn't good enough for investors: After rising 9 cents during regular trading Tuesday to close at $4.14, CMGI shares plunged to $3.40 in after-hours trading on



By the Numbers

For the quarter ended April 30, CMGI reported revenue of $301 million, up from $233.1 million in the year-ago quarter and better than its March guidance of $280 million to $290 million. (Only one analyst publishes estimates for CMGI.) In its fiscal second quarter ended Jan. 31, CMGI reported revenue of $342.7 million.

Toward the bottom line, CMGI reported a "recurring operating loss" (excluding amortization of intangibles and other items) of $131.7 million, or 38 cents a share, for the third quarter, smaller than the loss of $191.5 million, or 59 cents a share, in the immediately prior quarter.

CMGI's full net loss for the quarter was $963.3 million, or $2.80 a share, compared with a net loss of $2.6 billion, or $7.86 a share, in the January quarter and a loss of $430.2 million, or $1.53 a share, in the year-ago quarter.

The third quarter's $609 million impairment-of-intangibles charges related primarily to last year's acquisitions of Internet professional-services company


, online advertising technology firm


and media-streaming firm


. CMGI Chairman David Wetherell told analysts Tuesday evening that the company had proved unsuccessful in finding a buyer for AdForce and was winding its operations down. The company continues to seek a buyer for Activate.

CMGI says that because it has cut its "operating cash burn" -- which it defines as the amount by which operating costs, excluding restructuring charges, exceed revenue -- the company expects to cut its recurring operating loss to $120 million to $130 million in its fiscal fourth quarter. It also expects to hold the recurring operating loss for its next fiscal year to $120 million to $130 million. CMGI should exit fiscal 2001 at the end of July with more than $650 million in cash and equivalents, and exit fiscal 2002 with $325 million in cash, says Wetherell.