The company, which now combines the Web's two top technology news-and-information sites, also provided forecasts for the fourth quarter of this year and for the full year of 2001.
Income, excluding goodwill amortization, gains on investment sales and income taxes amounted to $6.2 million for the stand-alone CNet, or 7 cents a share. The consensus of analysts surveyed by
was for a gain of 3 cents a share.
Including goodwill amortization, gains on investment sales and income taxes, CNet reported a loss of $43.6 million, or 50 cents a share, compared to net income of $29.3 million, or 35 cents a share, in the third quarter of 1999.
Combined, CNet and ZDNet reported pro forma revenue for the quarter of $110.5 million, up 6% sequentially from the second quarter of the year. Going forward, the company estimated the combined operations would report revenue in the range of $120 million to $125 million for the fourth quarter of the year, and $580 million in 2001, which would be up around 35% from expected 2000 revenue. Earnings before interest, taxes, depreciation and amortization, or EBITDA, margins are expected to rise from a range of 15% to 16.8% in the fourth quarter to 25% in 2001 and 27% to 30% in 2002.
The company has $340 million in cash and equivalents on hand, and about $130 million in shares of 14 publicly traded companies.
Like other Internet companies this earnings season, CNet is telling the Street that its dependence on pure-play dot-coms, perceived by investors as a sign of weakness, is diminishing. In the second quarter, about 40% of the company's top 100 advertisers conducted all their business over the Internet, according to CNet Chief Financial Officer Doug Woodrum; in the third quarter, the dot-com contingent dropped to a third of these top advertisers.