Internet incubator CMGI (CMGI) met diminished expectations for its second quarter but announced a $2 billion charge related to various fiscal 2000 acquisitions.
The company, which said in January that it wouldn't meet its revenue target of $1.65 billion for the fiscal year ending July 31, also indicated it now expects about $1.3 billion in revenue for the year.
For the second quarter ended Jan. 31, CMGI reported revenue of $342.7 million, which puts it squarely within the $335 million to $345 million range it set two weeks before the quarter closed. Losses for the quarter, excluding various charges covering amortization, intangible asset impairment and restructuring, amounted to $216.2 million, or 66 cents per share, compared to $234.3 million the immediately prior quarter and $156 million in the corresponding quarter one year earlier.
CMGI's net loss for the quarter expanded to $2.56 billion, or $7.86 per share, from $637 million, or $2.07 per share, in the quarter ended Oct. 31, and $186 million, or 74 cents a share, in the second quarter of fiscal 2000.
Blaming the general Internet company valuation decline, CMGI said the $2 billion charge stems from its writedown of the goodwill associated with its acquisitions of the advertising-related companies
CMGI, which previously had declined to give guidance for its fiscal third and fourth quarters, now says it expects $280 million to $290 million in revenue for the third quarter and growth of 3% to 5% for the fourth. That means that the sequential revenue drop from the second to the third quarter will be at least 15%.
CMGI shares rose 6 cents Tuesday to $3.91, off their 52-week high of $137.
In one element of CMGI's ongoing effort to speed up profitability, the company announced further dismantling of the Internet empire it spent recent years building in a frenzy of acquisitions and venture capital investing. CMGI says it's investigating the possible sale of two subsidiaries: streaming broadcast firm
and ad-serving company AdForce.
In another illustration of how CMGI's venture capital efforts have wound down, the company says its projected funding for its
VC arm will be about $15 million per quarter, about half the rate it projected last November. In the second fiscal quarter, CMGI says its portion of investments made by @Ventures was $3.6 million. Last week, the company issued a press release
denying @Ventures had run out of money.
CMGI says it hopes to have in excess of $500 million in cash and securities by the fiscal year's end, and it projects that it has money sufficient to last it 27 months. That figure doesn't include funding for
, its publicly traded subsidiaries.
CMGI, which last year forecast that four of its five operating segments would have positive earnings before interest, taxes, depreciation and amortization by the end of this fiscal year, is now forcasting operating losses in all five segments. The company says certain businesses are projecting break-even operations by the first quarter of the fiscal year starting Aug. 1, but CMGI says it won't be more specific about such forecasts until mid-to-late May.