Radview announces Q4 revenue, losses will disappoint the Street

Company says revenue will grow by 110% in 2001
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RadView Software

(Nasdaq:RDVW) was a sore disappointment to anyone who hopped on board from Day One. Its shares are down 70% from their IPO level. Despite the confident statements its managers persistently released, it was clear that something was wrong. Today the company released an announcement titled Radview anticipates 110% revenue growth for 2001. But the text had a different message altogether for investors: the company will not meet the forecasts it gave investors when it went public four months ago.

Radview said its fourth-quarter revenues will come to $2.7 million to $3.1 million, compared with a Piper Jaffray estimate of $3.6 million. Sales of $2.7 million are a cool 25% below the forecast. Moreover, the rosy growth forecasts were the basis on which the company which has never earned one red dime went public. Sales in 1999 were all of $5 million.

Nor is Radview apparently going to meet its profit forecast loss forecast, really. The company explains in its announcement that its loss will not be greater than 24 cents. But Piper Jaffray had predicted it would lose only 18 cents per share in the fourth quarter. A loss of 24 cents would be a harsh disappointment indeed.

Just how poor the news is becomes evident when considering that Radview's fourth quarter results will be worse than its third quarter performance, in revenues and losses too. Most companies selling equipment to organizations had a strong fourth quarter. Not Radview, which lost 18 cents per share in the third quarter.

Radview's products test traffic loads on Internet sites. The company is trying to bite into the market segment of

Mercury Interactive

(Nasdaq:MERQ), which is the supreme leader in its field. Although Radview is headed by Mercury graduate Ilan Kinreich, it has had little success. The comparison is sad: Mercury is growing and is thought to be one of the most important hi-tech companies in the world; Radview is having difficulty meeting forecasts.

The question now is by how much analysts will lower their sights. Current reports predict that Radview will end 2001 with sales of $27.2 million, posing growth of 140% compared with predicted sales for 2000. But conditions have changed and e-commerce companies are collapsing in droves. That forecast looks unrealistic.