FreeMarkets Says Revenue Shrank

First-quarter revenues were down 19%, while the company put guidance below Wall Street estimates.
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FreeMarkets

(FMKT)

, which sells software to automate online buying and selling for businesses, on Monday said first-quarter revenues were off 19% year over year, and the company continues to lose money.

Revenues for the quarter were $34.5 million, compared to $43.2 million a year ago. The company lost $11.8 million, or 28 cents a share, essentially flat with the 2002 first-quarter loss, according to generally accepted accounting principles.

The company's operational loss, which includes fees and excludes stock-based expenses and goodwill charges, was 6 cents per share, 4 cents better than FreeMarkets' and analysts' expectations. In the year-ago quarter, the company had an operational loss of 7 cents.

"The economic environment and IT (information technology) spending climate remain very challenging," said Joan Hooper, FreeMarkets' executive vice president and CFO, in a prepared statement.

Looking forward, FreeMarkets said it expected second-quarter revenue of $33.2 million to $34.2 million and a loss, excluding items, of 6 cents a share. Including items, it said its loss would be 17 cents.

Analysts are expecting FreeMarkets to have a pro forma (excluding items) second-quarter loss of 4 cents a share on revenue of $36.05 million.

FreeMarkets said it expected full-year revenues of $143.75 million and a pro forma profit of 2 cents a share. Including items, the company said it would post a loss of 53 cents.

Analysts were expecting full-year revenues of $151.85 million and a pro forma loss of 2 cents.

The last time the company turned a GAAP profit on an annual basis was in 1998, when it earned just under one-tenth of a penny per share.

In regular trading, the company lost 9 cents a share, or 1.3%, to $6.82 a share. Shares were down after hours, with the stock selling for $6.74.