Engage Sees First-Quarter Revenue Shortfall, CEO Resigns

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Engage

(ENGA)

lowered its projections for first-quarter revenue, citing a number of factors that include an overabundance of supply in the media market, weak demand from dot-com companies and an extended sales cycle for the software segment.

The company, a unit of Internet incubator

CMGI

(CMGI)

, also said President and Chief Executive Paul Schaut will resign, effective Nov. 20. Anthony Nuzzo will assume his duties.

Engage expects revenue for the first quarter ended Oct. 31 of $40 million to $42 million, compared with $66.7 million reported in the fourth quarter. Three analysts surveyed by

First Call/Thomson Financial

produced a revenue estimate of $56.5 million for the first quarter.

Excluding the amortization of goodwill and other intangible assets, stock compensation and other costs, Engage expects a first-quarter cash loss per share of no more than 25 cents, compared with a loss of 14 cents in the fourth quarter. Analysts expect the company to lose 20 cents a share in the first quarter.

The company expects "modest" quarter-to-quarter growth throughout fiscal 2001, with total revenue in excess of $200 million, even though many of the factors expected to hurt the first quarter "could persist into the next three quarters." Analysts on average expect full-year 2001 revenue of $337.8 million.